Saturday, July 23, 2005

Google priced @ 80B. USD?
While you're breakin' down my back n'
I been rackin' out my brain
It don't matter how we make it
'Cause it always ends the same
You can push it for more mileage
But your flaps r' wearin' thin

Google lost out on analyst estimates this week and dropped in market cap... I think the market needs to check its head when it comes to this one. One more bubble to pop:
Book Value/Share ($) 12.34
Cash Per Share ($) 3.17
Current Ratio 8.00
Div/Yield % 0.00
Indicated Annual Dividend ($) 0.00
Latest Div. Date NA
Float¹ 274.13
Market Cap¹ 80,902.50
P/E (TTM) 116.00
Price/Book 23.60
Price/Cash Flow (TTM) 91.90
Price/Revenue (TTM) 21.32
ROA (TTM) 18.20
ROE (TTM) 20.60
Shares Out¹ 277.78
Total Debt/Equity 0.00

Now revenue growth has been well over 100%, so you could argue that it's P/E over Growth is about 1.00 or so, which is decent, but the P/E assumes that this rate of expansion will continue. Honestly, I don't see it. Eventually, they will have a showdown with MS over the control of the desktop as Google moves into taking on the GUI format.

Back to the subject: Google looks a little shady.

They have exploding admin costs, executives selling off 8B worth of stock in the last 6 months, options being exercised at $0/share, and management that is purchasing and selling Google stock to ramp up contributed capital.

There's a few questions that analysts should be asking. But they won't. Google skipped out on going to Wall Street for the underwriting, but Wall Street might be hedging on the fact that this stock will bring investors back to the table.

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