Hey Blodget, Still Betting On Google $2,000?

Michael,

It’s important to recognize that stocks in general, and technology stocks in particular, have taken a giant nose-dive lately.

Adobe stock has taken a similarly-sized hit, even during and after announcing their best quarter in history.

I would expect it to jump back up, but I, as well, doubt it’ll hit $2000 in the near future.

high low 300$ anybody?

What an odd, backhanded compliment!?! I think Google will hit $2000 over the next 10-15 years. We all knew that Google would eventually falter, even if it meant missing absurd wall street expectations. They are mortal. Their growth is slowing but is still extraordinary. And, they have many new businesses being hatched that will someday spawn real revenue streams.

The stock market is a gamble no matter how you wish to characterize it, as such, sure, it can hit 2K… maybe even 3K if luck is truly on their site but history has shown time and again (just look at Microsoft for instance) that this years stars are tomorrows meteors… they all come crashing down eventually. The thump is always a surprise to those who put all their money into inflated stocks expecting previous momentum to be continued indefinitely. Google is no different… play with money you can afford to loose, otherwise, like what we saw with Apple just the past week… your gains over the previous year can be wiped out in a blink of an eye.

Jon
http://woodmarvels.com - Create Unique Memories

May be it will, never say never. One day Google will find the cure for cancer and practical replacement for fossil fuel.

Well that prediction got them great coverage

Absolutely still think it’s reasonable. Even more so now that the company’s almost at a $5 billion free-cash-flow run-rate.

I think there’s a good chance that the stock gets crushed in the near term as revenue decelerates and the search product cycle wanes ($300 is certainly possible, maybe even lower). But between search, video, mobile, apps, and whatever else they layer on, I’m comfortable with the $2000 scenario over a 10-15 year horizon.

That’s only 400% growth from this point. They’ve grown 350% in 3 years, you don’t think there’s a good chance they could grow the stock price 400% in 15 years?

To think that Google won’t be worth $2000 within 10-15 years would be much more surprising to me. 10% annualized growth in the stock price is not ridiculous for a powerhouse like Google.

$2000 could still be possible in 10-15 years but only if MS-Yahoo deal does not work out as well

RK
http://www.rentalandrealestate.com

You’re absolutely right Michael, a company that has a market cap of $154 billion and is suffering like the rest of the economy.

Those losers.

Really, they should have thought more realistically and wrote a blog that is becoming more mediocre by the day. Then they could hold their heads high.

Google is currently under-priced by about 20-30%. Give it a few months and it will be back up to at least $600… a great time to buy (no I don’t currently own this stock)

Why is Google at $2000 in 15 years so crazy?? The S&P index will on average produce a better return than this requires.

$500 compounding at a CAGR of 10% (compound annual growth rate) is almost $2100…if that is what happens, google will likely underperform the overall market….$2000 is a minimum.

The problem with the last tech bubble was that we assumed that a growth trajectory could continue indefinitely which caused unrealistic valuations. Everyone seemed to ignore the concept of a ’served market’ size which sets a practical upper limit to revenue. In other words when Google has 100% of all online advertising dollars that is it for revenue growth.

Some companies do figure out new revenue streams but betting on growth from yet to be defined, let alone tested, new business models is just that - betting. I am not an analyst and am not saying that $2000 is out of the question but I would like to see more projections that take into account the ’served market’ concept based on current revenue streams.

Goog 747 High 437 Low over 52 weeks, ~1.7094
Yhoo 34.08 High 18.58 Low over 52 weeks, ~1.8342

And yes that Yahoo high is before all this latest news, so most likely people could/would have made more money investing in yahoo in the last 52 week time period, Google blows. There % returns on stock price for say any oil stock + the dividends they pay would beat the return you would have had from purchasing Google stock.

I don’t see what all the fuss is since Google over 52 weeks has performed well under a lot more solid stocks, and even Yahoo.

I think it’s a good idea to look at the big picture!

http://finance.yahoo.com/q/bc?.....XIC,%5EDJI

Okay, in the last two years, GOOG’s growth has, with a notable exception (Sept 07 through Jan 08) matched the changes in the markets to within about ten percent. Even now, based on the start of the two year chart as a reference, GOOG is STILL doing better than the markets by a hefty margin.

Let’s look at the even bigger picture:

http://finance.yahoo.com/q/bc?.....XIC,%5EDJI

The overall trend looks pretty darn good: Even if they’re swaying with the tide a little bit, the stock still does very well. So the gains for the last six months were wiped out - big deal; if you invested six months ago and you’re freaking out now, you just missed a round of profit-taking. Wait it out for another year.

If only I could afford a few shares…

“google will likely underperform the overall market”

So you’re betting even higher than 10% for the rest of the market as we’re heading into a recession. You’ve got some…. chutzpah!

Well, in 10-15 years everyone will have forgotten that he made the prediction in the first place.

Going by inflation, What cost $700 in 1987 would cost $1307.29 in 2007. That’s a 20 year window, doesn’t seem so far off to shoot for $2000 15 years forward eh?

-mp

Ha ha, take that Blodget, you asshole, you’ve been TechPunched!
Oh, you didn’t get it, don’t you know I’m just kidding around!
And fuck you!

@17 absolutely right. With the coming inflation and decline of the US dollar, $2000 will be not much more than breaking even.

Mike, do you even read your own site? When Duncan put this post up:

http://www.techcrunch.com/2007.....t-company/

I used it as my own magazine cover 2.0 indicator to put a short on GOOG which has paid off handsomely. Thanks for providing the ultimate stock fade with techcrunch. I think I might get long some GOOG based on your post and cover my short although I’d feel better if it was Duncan who had posted it.

Tech leadership is tenuous. Sure, $2000 in 10-15 years is possible, that is, assuming, Google is still the dominant player. Have you forgotten that ten years ago, Yahoo was on top of the world?

I tend to avoid SVI as much as possible these days. The coverage there has just become too mickymouse. It is as if they expect the readers to have the memory of a goldfish - that would be the only way you could account for the conflicting predictions and analysis from one day to the next.

Reading Blodgett is just too infuriating.

i think the prices are falling because of slow down in USA economy not only google but everyone will have one or other impact on his/her life worldwide due to this slowdown

What’s happening to GOOG… $495?!! Anyway, buy more YHOO…

To get to $2000, Google would need to hit a couple more home runs. There is only so much left in the search market. The larger the business becomes, the more difficult it is to keep up with the CAGR that justifies the high P/E ratio. $2000 would be difficult even long term — however, $1000 over the next five years could be in reach.

Hilarious. I said GOOG was overpriced at $700 and shorted it and people laughed.

On Fri i said it was going to high 300′ in 60 days and a couple of you laughed. Now this.

The fundamental problem is that the valuation of these companies is not supported by any ability to exit. At $2000, the market cap is $600B, there is no company that can buy Google at that price, therefore the price is unjustified.

It’s quite simple really, if you tell me you have something for sale at a price nobody can afford, its not worth it. Unless there is some hyper-inflation which takes hold or GOOG throws off enough cash on its own to support a LBO, it won’t get to $2,000.

if facebook had a public mkt and started at 15 bill mkt cap the same day of googles peak, and the market “correction” , google correlation, and recent data including marks stats flushed out, where would it be trading this evening? wanna vosnap? what the hell was that disaster of a weekend!!!!

The honeymoon between Wall Street and Google is over.

Inflation and the sort, no one can predict on long term, but google should get to $2k at some stage and sooner (less than 10 years) rather then later is my bet

Quellt horreur !

A tech stock has plunged back to the levels of, err, 6 whole months ago. In a falling market.

Guess what - the price of shares can go down as well as up.

Try telling us something we don’t know.

I’ll make a prediction: Google shares will be worth $30,000 a share in 10 years time.

How?

£1 will equal 3,000US dollars as the US plunges into its deepest recession yet with the dollar dying like a wounded cat.

Id start converting your US dollars now before you can’t buy a loaf of bread for less than $10,000.

Btw… $2000 in 10-15 years wont be worth anything by the looks of how the value of the USD is going downhill

Lol @ Poker Sharks comment.

I have asked many people many times, and everytime they have scoffed at me and called me a naysayer…now that I have become immune to cold stares and harsh words, I will ask this again - why on this blessed earth is anyone valuing a one-trick pony - and even in that trick not really unbeatable as there are no entry barriers - at such a ridiculous price?

What is so great about google now, can someone tell me? They are leaders in search, but come on, yahoo search is as good, so google’s quality is more in the minds of the users. Google is a leader in absolutely nothing else, and in all others is not even second. All its services other than search are losing money and some are likely to result in serious blood loss owing to legal suits.

Well, may be they’ll make tons money in partnership with NASA while searching for extra-terrestrials…Mars dollars anyone?

please please please do a shout out for the “microsoft is dead” pauline ghram as well. don’t be afraid to slam your web 2.0 fan boy.

@ 18 - WTF are you talking about? Dollar Inflation does not affect Stock Prices, only dollar prices of goods and services to buy - complete misunderstanding of markets.

This current drop is not about earnings - its all about multiple compression. Google still trades at a premium to the market, around 40 times this year vs. 20 times for the SP500. It has this premium (which just a few months ago was nearly 60) due to its higher growth rate and favorable risk/reward ratio. As that goes away, suddenly even though earnings look great, multiple comes crashing down so the stock looses 1/3 - 1/2 its value within weeks. Its all happened before, will continue to happen in the future as expectations reset.

http://www.infosupply.com

seriously? a must read? i have covered the internet sector for several yrs and read all of the major rags, i also publish myself. i read alley insider too, but there is honestly VERY LITTLE ORIGINAL JOURNALISM/WORK being done at SAI. the vast majority of their content is repurposed, reblog stuff. a must read? doesn’t seem repetitive to you (i.e., a waste of time)?

Only 51% revenue growth last quarter from previous year? Pfftttt! That’s pitiful. A mere 14% quarter-over-quarter growth last quarter? You disgust me, Google.

Seriously, though. Google’s having a pullback, no big deal. Their long term projected growth rate is still awesome. $2000 in 10 years seems conservative. Avg analyst target on GOOG is still $710, which usually means within a one year timeframe. If they grow at an avg of 20% for 5 years, then 10% for another 5, that should put them there.

And those estimates are based on current revenue sources, aka search advertising. Enterprise Apps has huge potential to take market share from Microsoft, for example.

GOOG may well grow at 10% CAGR, but the recent correction has been long overdue. Even now, after the huge share price decline, it’s trading at 8.5x revenue, 23.3x EBITDA and 37.3x earnings, not exactly cheap, but far more reasonable than the recent heady valuations.

Google is good in search advertising, and nothing else (and if the proverbial three guys in a garage come up with a better algorithm, it could lose much of its luster practically overnight). They will have to find new areas of growth to justify high premiums to the broad market.