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| 5/24 |
| 2008/9/29-10/4 [Computer/Companies/Google] UID:51326 Activity:moderate |
9/29 Just six more days like today! -GOOG short $100 guy
\_ It's already half of where it used to be in spite of fanbois
like Tom talking it up like it would be the next GE. BTW, BRK-B
was up today. Very interesting that it's up on a day like today.
\_ GE 52-week high: 42.15. Current: 23.10. -tom
\_ GE market cap = $228.80B. GOOG market cap = $119.80B.
\_ yeah, so? -tom
\_ GOOG's not there yet and probably never will be.
It would not have made sense for GOOG to stay flat
while GE fell in half. GOOG's already
overcapitalized as-is.
\_ By what measure is GOOG overcapitalized? What do
you think a reasonable PE ratio would be for GOOG?
-tom
\_ The same measure that allowed AOL to purchase
Time-Warner only for the company to later
pretend AOL never existed.
\_ That's not an answer. It's not even Eng Time-W\
arner only for the company to later
pretend AOL never existed.
\_ That's not an answer. It's not even English.
What do you think a reasonable PE ratio would
be for GOOG? -tom
\_ What do you think a reasonable market cap
would be for GOOG?
\_ I think GOOG can support a trailing PE
in the neighborhood of 30 and a forward
PE in the neighborhood of 20 for at
least the next two years. How that
translates into market cap will depend
on macroeconomic issues. Google will
still be the dominant internet search
and advertising firm two years from now,
but it will depend on the advertising
market. -tom
market.
Now will you answer the question? -tom
\_ PEG should equal about 1 and it looks
like GOOG growth is down to about 10%,
so P/E should be 10. It is about 3X
overcapitalized then.
\_ Well, if GOOG's growth is really
down to 10%, you might be right.
But in 2007 GOOG made $9.9B,
and it has already made $6.3B in
But in 2007 GOOG made $4.2B,
and it has already made $2.6B in
the first two quarters this year,
so you're off by at least a
factor of two, barring
macroeconomic conditions which
impact Google's growth (and
everyone else's). -tom
\_ What is GOOG's forward growth
rate? I would be surprised if
they grow at even 10% in Q4.
\_ I think it's safe to say
that GOOG's forward growth
rate is higher than the
broad market's. From
06 to 07 earnings grew
by 40%. From 07 to 08
they look likely to grow
by at least 25%. So
by your own measure,
Google is fairly valued.
-tom
\_ (9/30) Damn, it's now up 7.66% so far today. |
| 5/24 |
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