Google shares plunge in after hours trading
02-01-2006, 10:59 AM
#21
Originally Posted by dragon2218,Feb 1 2006, 09:46 AM
what does it mean other than (current share price)*(# of outstanding shares)?
Google, until recently, had unlimited growth and earnings potential (at least in the eyes of many investors), so that drove the stock price through the roof. Stock price has little to do with current reality and much more to do with future potential of a company to drive above-average growth, earnings, and ROI.
Tell Kirk K. that he's a retard for investing hundreds of millions of dollars into GM and see where that gets you.
02-01-2006, 12:34 PM
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Originally Posted by QUIKAG,Feb 1 2006, 02:59 PM
Mathematically, you are correct. But, what determines share price? That is what drives capitalization to the largest degree.
Google, until recently, had unlimited growth and earnings potential (at least in the eyes of many investors), so that drove the stock price through the roof. Stock price has little to do with current reality and much more to do with future potential of a company to drive above-average growth, earnings, and ROI.
Tell Kirk K. that he's a retard for investing hundreds of millions of dollars into GM and see where that gets you.
Google, until recently, had unlimited growth and earnings potential (at least in the eyes of many investors), so that drove the stock price through the roof. Stock price has little to do with current reality and much more to do with future potential of a company to drive above-average growth, earnings, and ROI.
Tell Kirk K. that he's a retard for investing hundreds of millions of dollars into GM and see where that gets you.
what I had inferred from the OP is that he believed the public didn't think that Ford and GM had as much potential for growth as Google, hence the lower market caps of the auto companies.
i guess i'm just confused because i think you and the OP are basically saying the same thing.
as to kirk k, he obviously believes something about GM that the general public doesn't at the moment. i for one, hope GM pulls through for the sake of our economy, and for the sake of more competition and better cars by everyone
02-01-2006, 12:51 PM
#23
Dragon,
We're on the same page. The OP was trying to imply that Google was truly worth 10+ times what GM is worth. That is ridiculous and goes to show how little he really knows about value versus growth companies and what drives the underlying components of the market capitalization.
We're on the same page. The OP was trying to imply that Google was truly worth 10+ times what GM is worth. That is ridiculous and goes to show how little he really knows about value versus growth companies and what drives the underlying components of the market capitalization.
02-01-2006, 01:21 PM
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Originally Posted by aklucsarits,Feb 1 2006, 05:43 AM
It is one of the more creative ways to take a dig at Ford and GM I've seen on this board. I will award +2 points for the effort, -50 points for logic.
So Google's market cap > Ford and GM market caps combined. Therefore, Ford and GM = poop. But then Google = poop now too since they had lower than expected profits last quarter. Therefore Ford and GM = super poopy.
And if we continue with that "logic", Google's market cap is still more than double that of Honda Motor Corp. Honda announced blowout earnings just 2 days ago. But Honda's market cap is still much lower than Google's. And as we previously presuposed, Google now = poop. Therefore Honda must = worse than poop too.
Toyota Motor Corp has a market cap that is slightly higher than Google. But Google = poop now. Therefore Toyota = slightly better than poop.
So there you have it: All automakers are worth less than poop - Except for Toyota, who is worth marginally more than poop is worth.
Andrew
So Google's market cap > Ford and GM market caps combined. Therefore, Ford and GM = poop. But then Google = poop now too since they had lower than expected profits last quarter. Therefore Ford and GM = super poopy.
And if we continue with that "logic", Google's market cap is still more than double that of Honda Motor Corp. Honda announced blowout earnings just 2 days ago. But Honda's market cap is still much lower than Google's. And as we previously presuposed, Google now = poop. Therefore Honda must = worse than poop too.
Toyota Motor Corp has a market cap that is slightly higher than Google. But Google = poop now. Therefore Toyota = slightly better than poop.
So there you have it: All automakers are worth less than poop - Except for Toyota, who is worth marginally more than poop is worth.
Andrew
Just as an FYI - I'm purchasing 1000 shares in Ford this week. Their P/E ratio is amazing and I believe that they will be a much stronger player after their re-org.
02-01-2006, 01:40 PM
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Originally Posted by QUIKAG,Feb 1 2006, 08:22 AM
The only thing I realize is YOU don't understand what MARKET CAPITALIZATION really means.
Nice try though, slick.
Nice try though, slick.
market cap = number of shares outstanding * share price
I would encourage you to enroll in 'Finance 101' because you have no idea what you're talking about.
What you are REALLY referring to is company valuation. However, that concept and its associated models is introduced in 'Finance 201' which you clearly haven't reached yet.
02-01-2006, 02:03 PM
#26
Sure thing, slick. Ask my CFO how little I know about finance.
02-01-2006, 05:54 PM
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Originally Posted by cthree,Feb 1 2006, 11:32 AM
"ads value" nice freudian slip 
You forget that Google doesn't actually own [hardly] any of the information is serves. Google is almost purely a service company. They provide a search service. They provide a news aggregation service. They provide a map viewing and navigation service. The provide (and earn almost all of their revenue from) an advertising brokerage service. Googles value is in doing those things extremely well and in their brand.
Another provider could offer all of the things Google does (many do: MSN, Yahoo, etc.) but none of them do it anywhere nearly as well. Investors are buying the Google brand and the current success it's had delivering their message to the consumer.
A manufacturing company is an entirely different ball of wax.
You forget that Google doesn't actually own [hardly] any of the information is serves. Google is almost purely a service company. They provide a search service. They provide a news aggregation service. They provide a map viewing and navigation service. The provide (and earn almost all of their revenue from) an advertising brokerage service. Googles value is in doing those things extremely well and in their brand.
Another provider could offer all of the things Google does (many do: MSN, Yahoo, etc.) but none of them do it anywhere nearly as well. Investors are buying the Google brand and the current success it's had delivering their message to the consumer.
A manufacturing company is an entirely different ball of wax.
Sam
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