Those morons are hiring like there's no tomorrow just like during the mania: "More Workers The company hired more people than expected last quarter, Chief Executive Officer Eric Schmidt said on a conference call. Google added 1,548 jobs, mostly in sales, marketing and engineering, bringing its total to 13,786. ``We overspent against our own plan on headcount,'' he said. ``We decided it was not a mistake. The kind of people we brought in were so good that we're glad we did this.''" http://www.bloomberg.com/apps/news?pid=20601087&sid=aslvVeBAyehQ&refer=home
GOOG is a glorified ad agency, it should have similar valuations to other media giants, and thats where the spead will narrow.
remember they had something like 68% annualized sales growth even this quarter, and they are getting something like a 28 multiple. these aren't heady valuations. the mere market cap makes it seem that way, but this thing has plenty of upside, mainly because its a multinational and IS the leader. And not just an ad agency. They have a lot of potential -- youtube monetization, etc... Granted no one believes they will sustain 68% revenue growth, and thats why the multiple is 28 ... but a 35-40 multiple (25% higher.. 600) is really doable in this market. Nothing bubble about it. Really. Now BIDU getting a 192 price makes me wonder .. they are being priced for accelerating sales growth past 80%. Post last earnings, a 140 target seemed 'fully valued' to me based on 60% earnings growth. I bought 550 and 560 short july, long aug calendar spreads, so i'll disclose i'm a little bullish the stock. But in the near term, i think it was a little overextended. I'll be watching on the sidelines deciding what to do with it. Maybe if in one week we are at current levels or lower I may buy aug/sep 510 calendar spreads -- since this has a habit of being stagnant and consolidating. This may play like RIMM -- back to 550 in 3 weeks. Maybe not. I'm not holding my breath and looking for a new trade, licking my wounds. But these bears talking 440 ... don't hold your breath. Look at AKAM for an example of a more massive earnings disappointment with lousy guidance, and look how it recovered. Despite goog's spending getting a bit ahead of itself, they aren't guiding for doom filled quarters ahead.
Has anyone listened to the conference call? I did and decided not to sell. 58% growth yoy on revenues of $3.87B!! So it missed a quarter. GOOG ROCKS!!
Handsome why don't you try and talk you;re pad a bit more...growth stocks that miss right around here??????ouch
nobody gets a margin call for one particular stock unless that stock is the only one or is the major portion of an account.
The problem here is that this is clearly a momentum play. A miss like this gives the impression that the momentum is slowing down. If that is the case it's bad news. Doesn't help that this company does not issue guidance, so people are left to guess. Some will predict it's over and sell, some will predict it's a blip on the chart and load up. Some will post inane garbage on Elite Trader. I will not make any predictions one way or the other, I will simply trade what I see.
Regardless of what GOOG does after OE today, there's a great one-day trade to be made here. If there is panic selling at the open, watch if fall and buy the calls on the bounce. The MMs will be buying into the panic, possibly even dropping the bid to extreme levels to add to the panic, then selling into an equally extreme bounce and short squeeze for those foolish enough to short at the open. If there is huge buying at the open, the opposite will happen. Big money to be made today however it plays out. A fairly reliable tactic is to watch what the crowd is doing at the open and take the opposite trade when the momentum fades. Good luck to all.