Alan Murray of the Wall St. Journal gets what the analysts and tech-pundits don't get, that Google isn't looking to make some mysterious buyout, but that they have a great opportunity to raise some, ahem, Mad Money:
Let's try a little test. If I offer you $100,000 for your Honda Civic, how would you respond? Here are your choices:
a) "No, thank you, my checking account is already full."
b) "Maybe, but let me look around first to see if there is another car I'd like to buy."
or
c) "Here are the keys."
If you answered a) or b), you have the makings of a Google analyst.
There is no mystery here, folks. When companies think their stock is undervalued, they buy it back. The Googlers are in the opposite fix. Their stock is overvalued, so what do they do?
Sell more. Quickly. Before sanity returns to the marketplace.
Now I know there are a number of hypothetically smart people out there who think that at $285 a share, Google still is a bargain. Some were quoted in the pages of my favorite newspaper last week. "We think it's extremely cheap at this level," said Jason Schrotberger of Turner Investment Partners Inc.
But it is a credit to Larry Page, Sergey Brin and Eric Schmidt, the trio who run Google, that they aren't drinking this intoxicating Kool-Aid. It is always hardest to recognize a bubble when you are being lifted by it. But the Google boys seem to have gotten the message.
Thankfully, The Stalwart understood this one too.
UPDATE: Back in the bubble days, companies' stock prices actually benefited from having losses. They were a mystery, and people will pay anything for a mystery. The moment they'd cross into profitability, people would realize that they're paying 1000 times earnings for a company growing 30% per year. Not quite worth it. Although Google is profitable, I think they're benefiting from this same phenomenon, as everyone waits in anticipation for what category-killer Google will release next. Google bank? Google WiFI? Google TV? Google TVOIP? GTunes? Google Browser? Google OS? Today they released their IM client, and frankly, it looks like every other IM software that exists already, ho-hum. At least there aren't contextually relevant text-ads inserting themselves into the conversation.
Finally, the near-negative beta on Google Stock continues to be astounding. Down on up days, and up on down. Yesterday was another clear example of this. When I when short it (5 shares), I thought it would be a small hedge to my portfolio, but in fact it's been just the opposite
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