GOOG Google: CIBC comments on GOOG/DELL deal; firm lowers their '06 and '07 EPS estimates & tgt (348.19 ) -Update- CIBC expects the GOOG/DELL deal to be slightly higher than breakeven for Google, due to the large bounty paid to Dell. They think the near-term benefits of this page are protection of Google's search market share, higher traffic and higher top-line revenues. Longer term, they believe the deal will help Google create additional monetization opportunities in the desktop software market. Despite possible long-term benefits, they believe Google's aggressive stance in securing Dell and other distribution deals will lower margins, increasing sales expense by about 250 bp in '06. Firm is lowering their '06 and '07 EPS estimates to $8.73 (consensus $8.83) and $11.55 (consensus $11.96), and their price target to $500 from $520.
Here are some reasons to look at GOOG again at this level. 1 Everyone is now negative on GOOG. Analyst claiming 2000 price on GOOG are history. Now you only hear dwngrades. 2 GOOG remains the 800 pound gorilla in terms of innovation in the internet field. 3 Large scale advertisers are now moving in to internet advertising. I have been studying search results across many categories and in many cases small niche players are being pushed aside by larger companies. The dynamics of advertising industry is such that if Home Depot makes major push online the number two and three have to follow. The players complaining are the niche web only retailers who had the field to themselves till now. 4 Having learned its lesson last quarter GOOG will beat its earning estimates handily. IMHO
Being a long time bear on Google since it touched around $450 (search for previous posts), I think GOOG is setting up to move significantly higher (10%+) provided the market doesn't tank. It's been creating a base around this range for a while now. I have started accumulating small lots of GOOG but will sell if it falls below $295.00 Let's see how this goes. P.S. I've also been accumulating shares of AMZN. I think this market will run up one more time before a 3rd quarter drop.
There you have it. 348 level was established at 11:50 on 3-20 and confirmed today at 9:55est. Conclusion of this little experiment is that GOOG is possible to forecast by using TA only . My kind of TA ,that is . Thank you for your comments.
I had some discussion in one of the various Google-threads in ET (there are so many, I can't find it anymore) where someone claimed that Gmail was so "reliable" that he moved his company's email over to it. I would just like to mention that Google's Blogger (which is a place where people host their blogs) has been having unbelievable problems and in my opinion has shown incredible lack of professionalism in handling them. Not only have blogs hosted on them been down for DAYS since last Thursday with blank-page http error 403 access denied, not only does it still have interminent disk-full errors (harddisk space too expensive for google?!!!), but instead of devoting 100% attention to the problem, Google Blogger party animals decided to punish the offending hardware Granted that I've never encountered such abysmal performance in any of the other Google services, but after the recent Blogger experience I'd NEVER trust a Google service for a long time.
Last Friday I could see that GOOG is going to bounce back from its low. So I bought some Calls and I sold yesterday in its high and today I bought back again. I strongly believe that GOOG will hit 355 till this Friday. I am not sure whether it will hold that level or not but I am betting on hitting 355 and did my trade based on that.
What calls did you buy and at what price? Also, have you placed limit and / or stop orders to close them, or you plan to see how it goes?
350 Call. Bought 12 sold at 18 and 19 on Friday and bought back again at 13 today. I will sell at 18 again. I don't have a mechanical stop limits. Sometimes I sell naked PUT and when I lose money on that I also sell naked Call to offset the loss by making a spread. I also have a couple of naked PUT 370 for April.
I bet GOOG tumbles at 2 times the rate of the broader markets. If the broader markets continue a slide after Bernanke's "I don't know" wisdom. Ciao! Stacy