Google shares may fall another 50 pct-Barron's Sunday February 12, 1:24 pm ET SAN FRANCISCO (Reuters) - Shares of Web search leader Google Inc. (NasdaqNM:GOOG - News) -- off 24 percent from highs set last month -- could face a further 50 percent decline, Barron's said in the financial weekly's February 13 edition. Barron's scenario for a fall in Google's stock is based on speculating about what may happen if mounting competition or fraud by users of its Google's ad-buying system led to a 20 percent shortfall in bullish analysts' 2006 revenue estimates. The weekly uses a back-of-the-envelope calculation to show how a 20 percent revenue miss could cascade into a 30 percent profit shortfall. Such a drop could then lead to a decline in the price-to-earnings multiple of the stock to 30 times earnings from the present P/E ratio of 41, it said. "That would make the stock worth $188, versus its recent $360," Barron's reported. The stock traded at levels above $471 on January 11, but closed at $362.61 on Friday on Nasdaq. The story recites the usual litany of threats to Google's business -- potential competition from Yahoo Inc. (NasdaqNM:YHOO - News) and Microsoft Corp. (NasdaqNM:MSFT - News) and the vulnerability to Google's advertising franchise from "click fraud" fake ad transactions. And it criticizes the wide use of employee stock compensation. Barron's quotes several Google bears -- two Wall Street analysts with "sell" ratings on the stock, bearish investment strategist Fred Hickey and former Merrill Lynch Internet analyst Henry Blodget, who a month ago laid out a case for Google falling to $100 on his InternetOutsider blog. The weekly also sees Google in growing conflict with book publishers, cable companies and telephone companies. http://biz.yahoo.com/rb/060212/google_stock.html?.v=1
>Barron's scenario for a fall in Google's stock is based on speculating about what may happen if mounting competition or fraud by users of its Google's ad-buying system led to a 20 percent shortfall in bullish analysts' 2006 revenue estimates. Bullshit, even if the revenue falls into estimate it remains that Google is just priced like former worldcom lol
I have not respect for FORBES... http://www.forbes.com/2006/03/02/google-yahoo-0302markets13.html?partner=yahootix Forbes: GOOG could fall 50% in 2006 NOW: Forbes: Google Seen With 30% Upside Potential Versus Market Since they called both sides, they have to be right at least one of them