Jim Cramer has a segment called “Pimping all over the World” and that brings to mind the concerted global effort that is underway to reinflate Google’s stock price right on the heals of the concerted global effort to bring the stock price down for the previous two weeks.
It goes all the way down to Australia where they say Yahoo is just going to give up and let Google be the market leader: http://www.smh.com.au/news/breaking/yahoo-stops-chasing-google/2006/01/25/1138066832224.html
Despite the company’s high and mighty principles in the US, they are bucklng under in China and will run a censored version of the search engine so as not to cross any Party lines. The Google guys actually said “It is better for the Chinese to have access to censored information, than not to have any at all.” LOL!!! What’s the price of principles? About $40 a share I guess.
That being said I covered my Feb $410 puts with March $490 calls so I don’t care what the stock does as long as it does something big! If we break $450 tomorrow I will probably dump the puts and rebuy before earnings on 1/31.
I am still leaning short as Google is expected to earn $1.76/share this quarter, up over 200% from Q4 ‘o4 on revenues that are only estimated to be up 50%. So you see where they might conceivably miss just a bit. If they beat though – well what else can you do but buy the stock?
Yahoo had pretty good earnings and dropped all the way from $44 to $34 in one week, add a 0 to that and you have a pretty good picture of what can happen to Google if they miss as well.
There is no doubt that Google is a strong stock, the last two days have been amazing but both days together only total the volume of Friday’s sell-off so it remains to be seen what will happen tomorrow. The Googlephiles are hanging their hats on the China sell-out being a benchmark event for the company that gives them another 2Bn eyeballs (if everyone in China had a computer rather than the 50M people who actually do) to sell clicks to.
Google is not Starbucks or Wall-Mart and their product faces many hurdles in Asia which may be why there has been so much insider selling of late: http://finance.yahoo.com/q/it?s=GOOG
Ordinarily, I would dismiss this kind of selling but scheduling $500M in stock to be sold pre earnings is a little worrisome to me. Insider sales last quarter made up a whopping 10% of the float, leaving insiders with just 35% of the company while institutional ownership has paired down to 35% (also down 10%).
While it is possible that the float is being increased in order to comply with inclusion requirements for the S&P, it is equally possible that we are witnessing a pump and dump scheme of global proportions.
Today had a huge inflow of fund money so it is also possible that last week’s action was the deliberate attempt to scare retail holders (and weak funds) out of their shares. With just another week until earnings, this one could be a cliffhanger!
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Speaking of fund flows, I rarely see funds rush for the exits like I am with RIMM. Betting against RIMM is usually as dumb as betting against SNDK or GOOG but I had to buy the puts based on what I saw today. I am out if it breaks up over the 50 dma of $66.50 but this could be setting up for a biblical drop.
The second they resolve their legal battle, this stock is a buy but they seem ready to take this bluff into overtime with NTP.
http://online.wsj.com/article/SB113815273330355453.html?mod=yahoo_hs&ru=yahoo
http://www.forbes.com/2006/01/23/rim-patent-ruling-cx_df_0123rim.html?partner=yahootix
