“Citing concerns about about Google‘s plan to spend $12.5 billion to buy Motorola Mobility, Standard & Poor’s analyst Scott Kessler today cut his rating on the search engine’s stock to Sell from Buy, slashing his price target on the stock to $500, from $700,” Eric Savitz reports for Forbes.
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Savitz reports, “GOOG today is down $20.47, or 3.7%, to $536.76; the stock is now down 4.8% since announcing the deal Monday morning. Or think of it this way: Google’s market cap has been trimmed by $8.7 billion in the last two days, suggesting serious doubts among investors about the company’s strategy.”
Read more in the full article here.
I like their strategy. I like it a lot.
Over the past two days, since Moto Mob purchase announcement, GOOG has lost come 6% of its value, compared to AAPL. Since late April, the two were tracking mostly in parallel, until Monday announcement.
It is clear that the Street isn’t exactly enthusiastic about Google’s acquisition.
It’ll bounce back; reality and performance be damned, Wall Street is oft forgiving of companies with lofty slogans.
If Apple wins its patent lawsuit against Motorola and Motorola has to stop shipping Android devices, Google REALLY overpaid for Motorola. Google must be hoping it can slap GoogleTV in all those cable boxes Motorola makes.
Good luck with that.
Separate division I think. Not part of the deal..
Unless they didn’t buy all of google mobility the set top box division is on the mobility aide.
Yeah, a number of anal-ysts have been going on about how Google bought a manufacturer capable of Google TV hardware.
Which they need, since Logitech lost their shirt on GTV and have bailed out.
So the acquisition has actually cost shareholders a combined $21.2B so far…
Google only has one real product, is wasting money on everything else, can only manage beta-level software releases, is desperately and clumsily plagiarizing Apple, and now is in full blown panic mode. What’s not to like?
ain’t karma a bitch? 🙂
S&P is not credible.
Really?? What is AAPL’s rating, according to S&P?
Google… WINNING!
@daugav369pils …..”S&P is not credible”
I agree and stopped reading the article when I realized S&P was the source.
The downgrade doesn’t surprise me. Yet, still amazing S & P continues to exist given their insidious role in lending/investing events leading up to the 2008 financial meltdown. Of course, other bottom feeders in the S/P pool wouldn’t know such a thing as credibility exists, or is an important consideration when pursuing market opportunities..
Agreed on S&Ps role in the mortgage catastrophe, but their downgrade of U.S. debt was the right call, considering the dangerous game of chicken played in Washington using our credit worthiness as a hostage. And I think they’ve made the right call here.
3 years ago, GOOG was right about $500. Today it is $539. That’s pretty funny.
In 2007, on November 7, Google closed at 741.79
Apple closed at 191.79.
Apple started the year (2007) at 83, Google at 501.
Hindsight is perfectly depressing.
For whom? I’ll take a 100% increase over just under 50% anyday.
Except that as of today, it’s 350% (AAPL) and <8% (GOOG)
In factual news, Exxon Mobil is now a mere 4.63B ahead of Apple.
Let us remember that S&P does not have much of a track record. eg Lehman brothers
If you look at apple strategy, almost every new product they came out for the last 10 years is a greater success than the previous one. Today Apple makes more money from their mobility products than from the desktop products.
Problem with those Apple cloners is that they have success with one product, and the profits of that success help to finance a failure product (Microsoft Zune?). No matter how big is android, people who uses android is not willing to spend money so google still using search engine to finance android, and that is not looking like a good strategy to investors, as always, google is a hobby or beta products company.
Long AAPL. And it’s getting ready to rock and roll! Get on the train now or be left at the station.
This is prob. a good downgrade because the google stock valuation based on the rumors and subsequent launch of the “G-phone” has never panned out in actual money to the google bottom line. Now the search business, that had not made money off Android, is being forced to buy and handset maker to protect the search business?
On March 20, 2009 I advised a very wealthy friend to switch her GOOG for AAPL because I realized that Google was not a consumer products company when they flopped bad with their customer relations management vis a vis the Google branded nexus smartphone launch via the Web. Since then, Google is up 66.14% and AAPL is up 296.62%
Does anyone in their right mind think that Google is going to improve the horrible customer service experience at mobile carrier franchises and big box stores? Are they going to build a moto store with experts? I think it will be the Nexus customer experience flop all over again.
If GOOG cannot break out and show more than 3% of non-search revenue, investors are not going to believe the GOOGLE growth store.
Where’s that guy that told me Google’s 2% dip was normal?
Google stock will recover after it announces its divestiture of MotoMob’s hardware and other operating divisions — retaining only the patents it originally coveted.
That’s if and only of it gets the okay, more talk is out one that many don’t want this to go through due to all the offenses Google has committed, and with over 30 plus lawsuits that point the finger at them for coverups and treating 3rd party manufactures unfairly I can see this merger being stopped within the next month.
Google has some very large hurdles to go over and thier over confidence and do now, deal with it latter attude is going to hurt them more them most could ever imagine.
This is a failure and everyday it’s showing more so, 2 days in and it looks like this was a complete waist of Money, and if Google dosnt get approved for merger (I personally believe it won’t) they will have to shell out 2.5 billion just for the chance.
Not to mention the patents if they do get them won’t help with the oracle lawsuit that is bound to show intent of deception on Googles part, the noes emails show this and the judge will allow them in the trial, Google has tried to stop them but the judge said tough. google has to many problems and has problems with following rules, this will be the downfall of them.
Thomas65807,
Sorry I do agree with you also., I hit submit before spellcheck or completion of my post.
It’s like watching a very predictable soap opera. Isn’t it?
I wish we had a edit option on this site.