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Paper: Google 'Overvalued' at $500 Per Share

By Ed Oswald, BetaNews

November 27, 2006, 12:55 PM

Financial weekly Barron's said Sunday that shares of Google would likely fall from their lofty USD $500-plus price point set last week, triggering a sharp sell-off of the stock in Monday morning trading in New York.

The paper gave several reasons for its analysis. First, it said that the company currently is valued at some 37 times the expected earnings for 2007. Second, Google's growth has slowed considerably in recent months. Additionally, it is overvalued when compared with companies of similar sites.

Google shareholders seemed spooked by the news, selling off the stock in somewhat heavy trading Monday. By noon, the stock had fallen nearly three percent to $491.21, off $13.79.

The Mountain View, Calif. search company also has several factors working against it as it enters the new year. Expenses are expected to increase, however slowing revenue growth may not be able to offset the additional costs.

Furthermore, online advertising rates are falling, which has long been considered a key portion of the Google business. Thus, analysts are expecting much more modest growth -- 33 percent -- compared with the 81 percent expected growth rate for 2006.

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By Arakiel

posted Nov 27, 2006 - 5:43 PM

this just in: Barron's editor found to be shorting Google stock and making a fortune writing "the sky is falling" articles.

Score: 0

By xyzcb1

posted Nov 28, 2006 - 1:00 PM

He would be a fool if he short it. He should just buy put. More bux for the money.

Score: 0

By Flexewebs

posted Nov 27, 2006 - 4:10 PM

Reality: noone really knows how much Google is worth.

Speculation: do we think Google is worth $500 per share? I certainly do! I think it is worth even more (bare in mind here that speculators are taking into account projected work that will take place at Google and is taking place at Google right now also).

Thanks,

Jason
www.flexewebs.com

Score: 0

By ds0934

posted Nov 27, 2006 - 2:15 PM

Maybe if Warren Buffet bought Google it would warrant that share price, but $500/share is stupid.

Score: 0

By VikingBlade

posted Nov 28, 2006 - 1:22 AM

Well they did actually say they are following in the footsteps of Warren Buffett. Going under the theory that a higher price will mean more stability.

Score: 0

By drumcat

edited Nov 27, 2006 - 2:38 PM

Why, because they haven't split? What's BRK.A worth these days?
http://finance.yahoo.com/q?s=BRK-A

Score: 0

By ds0934

posted Nov 27, 2006 - 2:42 PM

Exactly my point.

Score: 0

By xyzcb1

posted Nov 27, 2006 - 1:52 PM

Analysts are full of s***. There is no such thing is under/over-value. The stock worth what a trader welling to pay for it at this moment.

Score: 0

By drumcat

posted Nov 27, 2006 - 1:55 PM

Indeed; for every seller, there's a buyer. That means all of those people who sold GOOG sold to someone willing to buy it at only a 3% discount.

Score: 0

By zridling

posted Nov 27, 2006 - 1:15 PM

What goes up.... However, stocks are tanking because the USDollar is no longer worth the paper it's printed on. Bush and repubs have created an almost $1 trillion trade deficit and they've taken so many hundreds of billions off the real budget that its deficit is at least $750b a year. Meanwhile, if the Chinese call in their bills and bonds, then the US is history, as Gold and the Gold standard are that much closer, and the USDollar is just another currency.

Score: 0

By uberfly

posted Nov 27, 2006 - 3:03 PM

zridling - the Chinese have bet their own future on the strength and stability of the US dollar. Tanking the US somehow would tank them as well. Hell, tanking WalMart alone would tank their economy. Welcome to the 21st century. Also, grow out of the political BS - because it's the latest Dem talking point definitely doesn't make it true.

Score: 0

By drumcat

posted Nov 27, 2006 - 1:54 PM

Hey, smart guy, why are stocks at record high levels then? "If the Chinese..." are you on crack? If they "called" everything (which they can't), they would ruin their own returns, and lose lots of money themselves. The Chinese are a lot of things, but stupid isn't one of them.

Add to that "Bush and repubs"... let's just say that while Bush has been a big offender, so have Dem congresses and Dem presidents. Everyone in the last 40 years has been guilty of it. So far, it hasn't hurt the economy. It hasn't thrashed our currency. It's also in everyone's interest for us to run a deficit. Considering our economy is 50% of the world economy, if we didn't run a deficit, there'd be a world recession/depression.

I think you need to stop the CrackerJack econ...

Score: 0

By Grazer

posted Nov 27, 2006 - 3:26 PM

Well, if intrinsic stock values are stable, and the values of currencies tank, then that will produce "record high levels" of currency for shares. People were using wheelbarrows full of money to buy bread and shoes in Germany pre-WWII, that doesn't mean the bread and shoes were suddenly more valuable.

Score: 0

By drumcat

posted Nov 27, 2006 - 1:12 PM

At 1pm ET, Google is off 3.2%, the NASDAQ is off 2%. So Google is off 1.2% away from the market. What part of that is "triggering a sharp sell-off"? I'm sorry, but this is just FUD. Sharp would be 10%...

Score: 0