Everybody short Google! (or buy puts)

Don't use rent or food money, but if you're in the markets at all and have some extra cash lying around you should be very happy by 5pm eastern today.

EDIT: A very interesting prediction was just made in the comment section.

Comments

[googalicious]

One interesting thing I have noticed- for the last 30 days there has been almost no insider selling at ALL, according to SEC or yahoo's insider transaction page.

Normally, Google insiders sell around 300 million dollars of stock (on average) every single month, and have done so since the IPO. Even in the quarters where Google missed estimates, they didn't slow down their selling beforehand. And in the quarters where Google beat estimates, they didn't slow down their selling beforehand either.

But for some reason, the last 30 days, there has been less than 20 million dollars of sales, and most of that was from a VC, not an actual "real" insider or employee.

So- why the sudden and complete lack of insider sales? Two explanations come to mind:

1) google is going to beat earnings estimates by more than at any time in the company's history and the stock will go up 200 points, so all the insiders have decided to wait until after the earnings release so they can make a gigantic profit.

2) google is going to miss earnings estimates by more than at any time in the company's history and the stock is gonna get crushed, but insiders have been warned they may be the target of shareholder lawsuits if it appears they were unloading massive amounts of shares before earnings that they knew in advance were going to be terrible. most of the shareholders are already multimillionaires, and they figure its better to take a 100 point drop in the share price and sell later, than sell now and end up in court for insider trading.

I'm guessing #2

BTW- is it a coincidence that comscore came out two days ago saying Google's click traffic has fallen 30% from december to april? Does that sound like it supports option #1 to anybody?

[.]

actually I think the correct monthly average selling is closer to 240 million dollars, not 300. of course those are only reported sales of major shareholders- the average google employee with only 10 or 20 million dollars worth of stock to sell doesn't have to report anything to the SEC so the "official" monthly average is probably too low.

[twelvepackaday]

Sounds like GOOG is going to lay a #2...a turd.

[.]

also don't forget that over the last month wall street analysts have lowered the average earnings estimate for GOOG from 4.76 per share down to 4.54.

CNBC just annnounced that for the first time in Google's history, the "whisper number" is lower than the lowest wall street analyst's estimate.

[Hiranjith]

I went ahead and bought a couple of April 450 puts. Won't kill me if admin is wrong, but I'd dearly like a piece of the action in case he's right.

[.]

April 450 puts are trading for 10 bucks, and the stock is basically at 450.

so the stock needs to drop 10 points just for you to make your original investment back!

these options are crazy-expensive..

[.]

oops, my bad - the april 450s are trading for 15 dollars! so the stock has to drop 15 bucks for you to make your money back.

which is even more crazy! :-)

[pat smith]

I thought: wouldn't it be ironic if used Google's own Finance thing to see about the stock and what's going on.

BTW: do they have anything NOT in BETA?

But here's the thing: Google Finance is fantastic. I'll never touch Yahoo's stock thing ever again.

I'll be keeping a close eye on this. Thanks.

[Joe Drop]

Let's spin the roulette wheel! Bought 20 contracts of April 410 puts at cost average of $2.75. Bought 20 of April 370 puts at $0.25 each. If the stock shits the bed, and drops even 10%, I'll make a profit (even if small). But with a 100 point monster dump drop, $$$$$ ring it up!

Of course, if this FuckedGoogle guy is wrong, and it goes up. Oh well..$6000 down the shitter.

[Joe Drop]

Let's spin the roulette wheel! Bought 20 contracts of April 410 puts at cost average of $2.75. Bought 20 of April 370 puts at $0.25 each. If the stock shits the bed, and drops even 10%, I'll make a profit (even if small). But with a 100 point monster dump drop, $$$$$ ring it up!

Of course, if this FuckedGoogle guy is wrong, and it goes up. Oh well..$6000 down the shitter.

[.]

Google's finance is certainly more web 2.0 than yahoo, with better charting features, but it lacks one thing- users.

Yahoo is by far the best place on the internet for stock discussion boards.. they have 100x the posts and traffic of anybody else.

[Joe Drop]

Sorry for the double post. Not sure how it happened.

Another by product of a dump would be the end of Yahoo's hopes and deluded dreams of a Google rescue. Microsoft would probably be able to wrap up the acquisition fairly quickly.

[Hiranjith]

I'm not as gutsy as Joe Drop. Btw admin I paid $13 apiece for my April 450s, so $2600 total "investment". I think I can afford to lose that. But you're right, the stock needs to drop to $437 tomorrow for me to break even.

[Joe Drop]

Here we go...3 minutes to close...let's hope that you're right on this one..................................

[Joe Drop]

Here we go...3 minutes to close...let's hope that you're right on this one..................................

[twelvepackaday]

after hours GOOG $500 +$50

[Hiranjith]

Admin sure flunked this one. And I'm out 2.6 grand...

[fucked]

Looking at the numbers it appears admin was correct- Goog beat on pro-forma numbers which included a few hundred million dollars of revenue from doubleclick, but they EXCLUDED the purchase price of doubleclick (1.6 billion) from their earnings, saying it was a "one time charge"

So Google basically bought their earnings this quarter and then said they didn't have to pay anything for Doubleclick.

On a GAAP basis, Google missed first call estimates.

[Hiranjith]

The only thing that matters is what the market thinks. Especially since the majority of people are ever-eager to kiss Google's behind no matter what they do. Oh well, nobody held a gun to my head ..

[anon]

Ok, so googalicious's #2 reason was wrong. does that mean reason #1 is correct? That seems to indicate massive levels of insider trading.

[Hiranjith]

Actually, it doesn't. If they held on to their shares without selling because they knew good news was coming, where is the insider trading? Unless they bought a ton of shares instead ..

[anon]

I thought I remember reading something about how the google guys had put themselves on regular selling schedules, so as to avoid worries about insider knowledge. If they then go off of those schedules, and don't sell, based on this knowledge, isn't that the same impropriety that the schedules sought to avoid?

[fucked]

I'm pretty amazed- if you look at the numbers Google's revenue was only 90 million dollars (thats million with an "M") more than wall street estimates.

Google is up 80 dollars afterhours. There are about 300 million outstanding shares of Goog. That means Google just grew 24 billion dollars in market cap for 90 million dollars of revenue.

Doubleclick contributed 82 million dollars of Google's revenue for this quarter, according to the reports out.

How does 90 million in revenue turn into 24 billion dollars? Does anyone have any idea?

[Hiranjith]

That's easy. This 90 million must be just the beginning. As we all know, the market thinks 6 months ahead. By the end of the year, $550 will probably seem cheap. And remember, we need to realize all future profits NOW.

[How 'bout that.]

"I thought I remember reading something about how the google guys had put themselves on regular selling schedules, so as to avoid worries about insider knowledge. If they then go off of those schedules, and don't sell, based on this knowledge, isn't that the same impropriety that the schedules sought to avoid?"

One would think so...

"I'm pretty amazed- if you look at the numbers Google's revenue was only 90 million dollars (thats million with an "M") more than wall street estimates...How does 90 million in revenue turn into 24 billion dollars? Does anyone have any idea?"

How does it indeed? Sounds like they are being fools for this stock on Wall St. as usual.

"That's easy. This 90 million must be just the beginning. As we all know, the market thinks 6 months ahead. By the end of the year, $550 will probably seem cheap. And remember, we need to realize all future profits NOW."

What' so "easy"? If you take the Doubleclick buy away (as Google should have done in the first place) you have a quarter that represents a slight downturn for them, as per another comment above. As per still another comment, you have their 30% drop in click traffic on top of everything else so what "future profit" is the market trying to realize now - today? YouTube is not profitable, no other app Google makes is profitable, clicks are down 30%...so what are we looking at? Can someone explain how we'll "realize future profits" now on a profitless search engine with declining click traffic and NO other source of revenue?

Thanks in advance to anyone who can satisfy my endless, burning curiosity on this topic.

[just me]

Google increased its net income (quarter over quarter) by about $300 million, but its accounts receivables increased by $400 million over the same period!

Receivables now stands at $2.56 BILLION -- this from a company which receives payment from its customers virtually "at-the-point-of sale"! Google's receivables number should be extremely low.

Of course, this accounting FRAUD is simply "over the heads" of most investors; most of the fools trading stocks have no clue about what to look for on a company's balance sheet.

.

[hk]

Man, Admin, that was a golden call right there. If you're available do you think I can hire you as my financial manager?

To anyone who lost money: hope you learned your lesson. And if you want actual good investment advice, stop the attempts at day trading, buy as much as you can afford in BHP, and then just forget about it - it's going nowhere but up, whereas long term I fail to see how GOOG can go anywhere but down.

Fuck all this day to day speculation in fragile tech stocks. You might make a few quick wins but you can lose just as easily, no matter how smart you think you are. You wanna be high value long term, not maybe a quick win here or there depending on "clicks"? Go long term, look at the fundamentals. Google's a fricking search engine, creates nothing itself, a better one might come out any day. BHP's got mining rights to Olympic Dam, there's a trillion dollars (yes a "T") sitting in there, China wants metal, you do the fucking math.

Day trading's for chumps.

[greatfuckupfuckedgoogle]

awesome call, fuckedgoogle. clearly you have inside information.

[notgivinit]

keep trying, admin. eventually you'll be right. even a stopped clock is right twice a day.

[crushed]

admin looks just as stupid as he did when he claimed Google was censoring him. Turned out he had "nofollow" on every link. Not the sharpest tool in the shed.

[suify]

The "nofollow" stalker comes back again? What a fucking surprise. Someone who spent dozens of posts obsessing over admin not setting a flag on typepad's interface.

Seriously- what kind of OCD medications are you on? Because they aren't working.

[Marah Marie]

Sufiy couldn't have posted that last comment because Sufiy simply wouldn't have (would he ever?) - moreover, whoever wrote the last two comments: you're both dead wrong. Get it through your heads!

In one sentence: it had nothing to to do with admin setting no-follow on outbound links. Got it? OK. Next sentence...

Admin hid the whole fucking site behind a frame AND stopped Googlebot (and all other search bots) from crawling FG. Got it? OK. THE END.

Now that I have that out of my system, how about never again bringing up what you can't explain? Thanks.

[jeff]

Thank you, all of you, for giving me a rough translation of what vultures are saying to each other as they circle for hours above something which to their tiny avian eyes and brains appears to be a corpse.

Don't let me interrupt. Carry on carrion. You are the froth around the bubble. Economy 2.0 needs your little avian brains to keep flushing money down the toilet. You are an integral part of the process. Never forget that.

[Dale boy trash]

Great call on shorting Goog you duche bag! It only went up 150 points in two days. You should be trading for GS or something.

[Mar Gincall]

Well, Mr. Investment Advice Hotshot Blogger-

You harp on Google for a lack of accountability, and GOOG is up nearly 30% since you advised all of your readers to short GOOG a couple of weeks ago. Nice work. Are you going to be making those people whole, or just continuing to dole out disastrous investing advice based on the implication that you have inside information?

Just curious.