Saturday, July 21, 2007

Google's stock plunges

Yesterday, Google announced its quarterly results.
Although Google had a profit of 925 million USD, which is 28% higher than last quarter, analysts were 'disappointed', because operating expenses were much higher than expected.
This 'bad news' caused the exchange rate of Google's stock to drop over 30 USD (about 6%) this morning when NYSE* opened.
During the day this loss was slightly restored, but today the value of the Google's stock dropped to a rate of a month ago.

I know stock exchange is sometimes irrational, but am I the only one to see that an increase in profit of 28% is rather well? Google's stock should have gone up today, not down.
I realise that profit could have been bigger if there had been less expenses, but a company like Google should invest in development, which costs money, in order to maintain its growth.

But probably the stockbrokers who caused the drop of Google's stock by mass selling this morning, were smart enough to sell when the stock rate was high and bought those stock back after prices had dropped massively, thus making about 30 USD per stock.
And suddenly stock exchange seems less irrational.

But then again, maybe now is a good time to buy Google stock, they're a lot cheaper than they were yesterday. ;-)

* NYSE = New York Stock Exchange, Google's stock is noted on NASDAQ

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