What's Up With GOOG?

Google (GOOG) is now down 33% from its closing high of $741.79 reached on November 6th, 2007.  Many investors are saying the stock simply ran too far too fast since IPOing back in August 2004, and that the company is overvalued.  At its peak, GOOG was up 772% from its IPO price of $85.  After 871 trading days, the stock is now up 483%.  We decided to compare Google's performance since its IPO to other technology stocks at this point in their lives as public companies.  Market cap aside, after 871 trading days, MSFT was up 458%, AMZN was up 1,783%, EBAY was up 1,789% and YHOO was up 7,918%. 

Compared to AMZN, EBAY and YHOO at this stage in their lives, GOOG looks like a bargain.  We all know that AMZN, EBAY and YHOO went public during Tech's heyday, but AMZN and EBAY are currently up 3,500% since their IPOs -- nearly double the price that they were at 871 trading days after going public.  YHOO is the only stock in the list that is currently lower than where it was 871 trading days in, but it was also up by far the most at 7,918%.  And even though GOOG likes to think of itself as the anti-MSFT, it is trading most similarly to MSFT at this stage in its career (483% vs 458%).  Twenty years from now, GOOG can only hope that it is up 43,000% from its IPO price like MSFT currently is.

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Comments

[Greg Feirman]

I know! I'm a buyer here below $500. It's cheap, like barely more than 20 times forward earnings. 3 months ago nobody could get enough Google. Now nobody wants to touch it. And in neither case does the actual value of the business seem to be playing much of a role.