Comments on: Is it time to short Google stock? http://www.diorex.com/is-it-time-to-short-google-stock/ Random Musings about Internet Marketing Fri, 10 Feb 2012 06:02:12 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: George Kim http://www.diorex.com/is-it-time-to-short-google-stock/comment-page-1/#comment-306 George Kim Fri, 30 Nov 2007 15:40:18 +0000 http://diorex.wordpress.com/2007/11/29/is-it-time-to-short-google-stock/#comment-306 Diorex, Another great reason to read your blog (with your finance background). I see why you are very analytical minded from reading all of your blog posts. Good stuff. I'm full time affiliate marketer now but former job was working for major earnings estimate company (rather not disclose the name). I went to school for finance. Anyways, I've seen too many people lose everything back in 2001-2002. (Long story). I personally will not short GOOG near future. My reasons are: There are ~30 analysts covering GOOG's stock at buy or hold, none are going to make fool of themselves and downgrade to sell rating. Too many institutional money involved and Google will not allow themselves to make history and miss their earnings for the first time. I personally don't see this happening in 08' - 09'. With so much cash on hand and no debt, they have too many variables/options to manipulate the balance sheet. (If this ever comes down to it). Plus, most companies will move on to only state their earnings once a year not quarterly. “Future Outlook” is far more important than “Current numbers” What “if”, we have seen things go burst with dot com. Eventually something so good will eventually come down and we are seeing this now with real estate market. So if Google does miss their earnings, we will definitely see panic selling from individual investors. Not immediate sell from institutional buyers (they could see this as potential reinvestment). Tough call to make. I was told long time ago from my mentor: “You can always find safety in a risky market if you just look deep enough” There are far better short selling opportunities out there. Diorex,
Another great reason to read your blog (with your finance background). I see why you are very analytical minded from reading all of your blog posts. Good stuff.
I’m full time affiliate marketer now but former job was working for major earnings estimate company (rather not disclose the name). I went to school for finance.
Anyways, I’ve seen too many people lose everything back in 2001-2002. (Long story).
I personally will not short GOOG near future. My reasons are:
There are ~30 analysts covering GOOG’s stock at buy or hold, none are going to make fool of themselves and downgrade to sell rating.
Too many institutional money involved and Google will not allow themselves to make history and miss their earnings for the first time. I personally don’t see this happening in 08′ - 09′.
With so much cash on hand and no debt, they have too many variables/options to manipulate the balance sheet. (If this ever comes down to it).
Plus, most companies will move on to only state their earnings once a year not quarterly. “Future Outlook” is far more important than “Current numbers”

What “if”, we have seen things go burst with dot com. Eventually something so good will eventually come down and we are seeing this now with real estate market. So if Google does miss their earnings, we will definitely see panic selling from individual investors. Not immediate sell from institutional buyers (they could see this as potential reinvestment). Tough call to make.

I was told long time ago from my mentor: “You can always find safety in a risky market if you just look deep enough” There are far better short selling opportunities out there.

]]> By: diorex http://www.diorex.com/is-it-time-to-short-google-stock/comment-page-1/#comment-305 diorex Fri, 30 Nov 2007 12:23:57 +0000 http://diorex.wordpress.com/2007/11/29/is-it-time-to-short-google-stock/#comment-305 I have thoughts to almost all the comments, but Andrew nailed what I was thinking but failed to state eloquently. I believe that Google has been manipulating results through quality score for a very long time and there is only so much manipulation a market can take. I have recently noticed several long term major players in my niche significantly dial back bids or leave the PPC space altogether. I have thoughts to almost all the comments, but Andrew nailed what I was thinking but failed to state eloquently.

I believe that Google has been manipulating results through quality score for a very long time and there is only so much manipulation a market can take. I have recently noticed several long term major players in my niche significantly dial back bids or leave the PPC space altogether.

]]> By: Andrew Johnson http://www.diorex.com/is-it-time-to-short-google-stock/comment-page-1/#comment-304 Andrew Johnson Fri, 30 Nov 2007 09:04:27 +0000 http://diorex.wordpress.com/2007/11/29/is-it-time-to-short-google-stock/#comment-304 The big wild card, as I see it, is Google's ability to increase their earnings with a few keystrokes (perhaps a bit of an exaggeration.) How hard is it for them to chop a few percentage points away from publisher's earnings or add a few pennies onto advertiser's average CPCs? My guess is this has been a big contributer to their "surprise" quarterly earnings for a while now. Something just isn't right when I hear about domainers and high quality content site owners seeing flat revenues over the past 12 months while online advertising is supposed to be growing at double digit rates. All of us involved in PPC advertising have been plenty suspicious of Google's smart pricing for a while now. The big wild card, as I see it, is Google’s ability to increase their earnings with a few keystrokes (perhaps a bit of an exaggeration.) How hard is it for them to chop a few percentage points away from publisher’s earnings or add a few pennies onto advertiser’s average CPCs?

My guess is this has been a big contributer to their “surprise” quarterly earnings for a while now. Something just isn’t right when I hear about domainers and high quality content site owners seeing flat revenues over the past 12 months while online advertising is supposed to be growing at double digit rates. All of us involved in PPC advertising have been plenty suspicious of Google’s smart pricing for a while now.

]]> By: Alex http://www.diorex.com/is-it-time-to-short-google-stock/comment-page-1/#comment-307 Alex Fri, 30 Nov 2007 06:44:34 +0000 http://diorex.wordpress.com/2007/11/29/is-it-time-to-short-google-stock/#comment-307 Diorex, Nice! I didn't know you have a financial/trading background. I also spent many years in that space. A few months back I did make some money playing GOOG to the downside (also played Goldman Sachs). This was done through options only (put and call spreads). As the cost and direct exposure via the equity instruments had large exposure. As much as I think GOOG is a well run company there is no question in my mind that this thing is one press release away from having a few hundred points taken off. Some of the acquisitions that GOOG has made have me thinking, why? But, they have have a smart group of corporate development guys that definitely buy best of breed (imo). May be there is a great scheme somewhere down the road; plus all these acquisitions don't add up to more than a rounding error on GOOG's balance sheet anyway. Even a $5B acquisition would be less than 2% of Google today. I also agree with you that the DoubleClick acquisition may not go through. As a matter of fact if I had a vote I would vote against it. Leverage - yes, there is other growth that Google can achieve outside the USA. But, IMO India, Turkey , Russia, Eastern Europe are garbage markets. There is so much fraud and corruption in those markets that the perceived growth may not be worth the hassle. China and Latin America are probbaly best bets and also I believe the top two growth markets with respect to new internet access/penetration. Alex Diorex,

Nice! I didn’t know you have a financial/trading background. I also spent many years in that space. A few months back I did make some money playing GOOG to the downside (also played Goldman Sachs). This was done through options only (put and call spreads). As the cost and direct exposure via the equity instruments had large exposure.
As much as I think GOOG is a well run company there is no question in my mind that this thing is one press release away from having a few hundred points taken off.
Some of the acquisitions that GOOG has made have me thinking, why? But, they have have a smart group of corporate development guys that definitely buy best of breed (imo). May be there is a great scheme somewhere down the road; plus all these acquisitions don’t add up to more than a rounding error on GOOG’s balance sheet anyway. Even a $5B acquisition would be less than 2% of Google today.
I also agree with you that the DoubleClick acquisition may not go through. As a matter of fact if I had a vote I would vote against it.

Leverage - yes, there is other growth that Google can achieve outside the USA. But, IMO India, Turkey , Russia, Eastern Europe are garbage markets. There is so much fraud and corruption in those markets that the perceived growth may not be worth the hassle. China and Latin America are probbaly best bets and also I believe the top two growth markets with respect to new internet access/penetration.

Alex

]]> By: Leverage http://www.diorex.com/is-it-time-to-short-google-stock/comment-page-1/#comment-302 Leverage Fri, 30 Nov 2007 05:59:55 +0000 http://diorex.wordpress.com/2007/11/29/is-it-time-to-short-google-stock/#comment-302 Honestly, even at those multiples, I seriously believe that Google is still undervalued. Given their limited penetration in Russia, India, China, the Middle East, and many "wealthier" parts of Western Europe, I believe there is significant room for further growth. Granted the income levels of many of those aforementioned countries is fractional as compared to US/UK/etc., but their sheer population numbers are staggering and cannot be overlooked. Furthermore, as computers and broadband become commodities (eg. Sysmar710), the worldwide adoption of the internet will accelerate at an exponential rate that I don't believe is currently priced in. Finally, and let's face it, Google hasn't "optimized" their current revenue streams to their potential. :) Also, I believe their entry into green power space provides (at least) a viable opportunity given they are one of the few companies with the war chest to take it on. Truth be told though, I'll be shorting in the near term and buying back down the road. Honestly, even at those multiples, I seriously believe that Google is still undervalued. Given their limited penetration in Russia, India, China, the Middle East, and many “wealthier” parts of Western Europe, I believe there is significant room for further growth. Granted the income levels of many of those aforementioned countries is fractional as compared to US/UK/etc., but their sheer population numbers are staggering and cannot be overlooked. Furthermore, as computers and broadband become commodities (eg. Sysmar710), the worldwide adoption of the internet will accelerate at an exponential rate that I don’t believe is currently priced in. Finally, and let’s face it, Google hasn’t “optimized” their current revenue streams to their potential. :)
Also, I believe their entry into green power space provides (at least) a viable opportunity given they are one of the few companies with the war chest to take it on.

Truth be told though, I’ll be shorting in the near term and buying back down the road.

]]> By: Patrick http://www.diorex.com/is-it-time-to-short-google-stock/comment-page-1/#comment-303 Patrick Fri, 30 Nov 2007 04:39:20 +0000 http://diorex.wordpress.com/2007/11/29/is-it-time-to-short-google-stock/#comment-303 When they miss I'm pretty sure it will be a "surprise" so why not just wait till the news hits. Sure you will miss a little because it will probably gap down huge, but just short it after lunch because you know that pig will tank eod and trend down for at least a week. When they miss I’m pretty sure it will be a “surprise” so why not just wait till the news hits. Sure you will miss a little because it will probably gap down huge, but just short it after lunch because you know that pig will tank eod and trend down for at least a week.

]]>