The Google Investor is a daily report from SAI. Sign up here to receive it by email
GOOG Diving With Market
Stocks are plunging in early trading after a disappointing labour market report became the latest data point to show the economy has stalled. Shares of GOOG are off with the rest of technology. Catalysts include continued Android momentum in the smartphone and tablet markets worldwide; regaining ground in China; any revival or partners for Google TV; the roll-out of Google Music and social network Google+; and progress in other newer initiatives (location-based services, mapping, gaming, Chromebooks, etc.). The stock trades at approximately 13x Enterprise Value / EBIT, inexpensive relative to historical trading levels.Google+ Gaining At An Impressive Pace… (Reuters)
Google’s new social networking service picked up about 25 million visitors from around the globe in less than a month, faster than rival Facebook in its early days, according to comScore. That’s the fastest growing website ever. It took Facebook three years to gather that many users. However, Zuckerberg didn’t have the power of 250 million Gmail accounts or 1 billion monthly visitors. That said, Google+ is growing at about 1 million users per day. At this rate, it will catch up to Facebook in two years.
… But It’s No Facebook Killer (Bloomberg)
With its new social network, Google has scored a huge blow against its archenemy. Yes, Google+ delivers features and functionality that Microsoft’s Bing search engine can’t touch. Wrong archenemy, you say? Google+ is supposed to be a Facebook-killer? Ehhh, not so much. The worst case is that Google+ becomes to Facebook what Bing is to Google, less a real competitor than simply an alternative with some interesting features that aren’t sufficiently compelling to ever lift it above being a distant second.
Google Fires Back At Patent Lawsuits Targeting Android (VentureBeat)
A few weeks ago, Google was involved in bidding for 6,000 patents being offered by Nortel, which many thought if Google should win, would beef up their defence against patent litigation. Instead, they lost to a consortium of Apple, Microsoft, RIM, Sony, EMC and Ericsson for $4.5 billion. Basically everyone won except Google. The search giant shot back calling the recent patent lawsuits targeting Android “bogus.” The success has produced “a hostile, organised campaign against Android.”
George Soros Loves Google Stock (Seeking Alpha)
The search giant still gets the lion’s share of its revenues from search and auction-based advertising programs. But Google is one of those rare companies that have made their name a household one and also created a new verb (how often do you say, “I’ll google that”?). With the Internet here to stay and on line business levels set to increase, this is a good buy in a company that retains the value of its profit by its policy of not paying dividends.
Daily Trader: Sell Google Put Spreads (CNBC)
Brian Stutland of Stutland Equities thinks that there’s no reason to keep money in cash when you have companies like Google and Apple out there. They are the best of breed with heavy cash balance sheets. GOOG stock is high, so sell a put spread so the cash lay out is less. Sell the 560 / 520 put spread with a break even of $548.