No Justice: Google Stock Plunges
The analysts who recently advised clients to sell Google have been proved prescient, as Google’s now-public fight with the Department of Justice has led to a sell-off.
Shares of GOOG dropped dramatically today, nearly 9 percent, to close at $399.46, 8.47 percent off the open of $438.70. Analysts from Standard & Poor’s and Stifel Nicolaus downgraded Google to “sell” on January 18th, a day before the news of a Department of Justice filing in San Jose against Google became public.
Advisories from those analysts, Scott Levitt of S&P and Scott Kessler of Stifel Nicolaus, became known early on the morning of the 18th. Google opened at $467.11 that morning and closed at $444.91. A small drop, but nothing like what was to come.
News of the DOJ filing against Google became public on the 19th, with hundreds of stories following the disclosure that Google had been fighting DOJ for a year over subpoenas for voluminous amounts of data from its search databases.
Today, Google saw investors mete out the kind of punishment that Yahoo received after disclosing its financials for the fourth quarter, which barely missed Wall Street estimates. Trading volume of Google today was nearly triple that of the previous day, 41 million shares to 14 million on Thursday, as investors pocketed profits and bailed out.
Google announces its financials on January 31st. CEO Eric Schmidt and company definitely need to roll out positive numbers during the conference call. Otherwise, the Googlers may feel like the crew of the Andrea Gail in “The Perfect Storm.”
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David Utter is a staff writer for WebProNews covering technology and business.