January 20th, 2006

Google, redux

Well, it came faster and more dramatically than anticipated. This is an example of where you give respect to charts. Google (GOOG) “crashed” down to the support trendline I included in included in my last chart on this stock a little over a week ago on January 12. The stock is actually now below 425, the level at my first comment on November 25.

Where to from here? I’d guess there’s a bounce back to arround 430-435 which could come in a couple of days, a week ….. but it should come.

Yes, fundamental analysts have come up with the “reasons” for the drop. One of reason was the Federal subpoena for search queries as a part of an investigation into child pornography.

Here’s a perspective I haven’t heard of elsewhere. Google’s main “asset” are its employees. However, with approximately 5000 employees, at a capitalization of $118.06 billion that works out to the market placing a value of $23.6 million per employee. I don’t care how much it earns, that’s just too high a valuation on it’s “asset” and goodwill.

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