Is It A Bird? Is It A Plane? No, It’s Google’s Share Price!
Duncan Riley
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Wow, maybe Henry Blodget wasn’t so wrong after all. Google broke through $700 a share in trading today, closing at a record high of $707, just over 3 weeks since breaking through the $600 mark.
Google did have the benefit of a surging NASDAQ; the exchange favored by tech stocks closing up 42.41 pts or 1.51% after the Fed cut US interest rates by 25 basis points to 4.5%. A range of analysts including Goldman Sachs, Credit Suisse and others have raised their target price for GOOG stock to $800 and above.
It’s not all clear sailing ahead for Google, though. The US Federal Reserve wouldn’t be cutting interest rates if it thought the US economy was healthy and the Federal Open Market Committee said that although financial market turmoil linked to a US housing downturn had eased in part, “the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction,” which if applied to Google would see its revenue growth slow.
International markets also present a problem for Google, with a decline that wasn’t widely reported when Google announced its 3rd Quarter earnings result October 18. According to Google’s statement, if it hadn’t been for currency movements international revenue would have dropped $121 million in the 3rd quarter (presuming that USD has remained at the same level). It might have been a blip but it’s certainly something to watch given most of Google’s growth opportunities should be coming from outside its home country, given the relative maturity of the US internet market.
November 4th, 2007 at 12:24 am