📆 April 18, 2010
Google earns $2 billion in its last quarter and investors reward it with a 7.5% drop in share? Here's my list of why it dropped:
People like to sell into the earnings news. With not much more to expect until the next earnings report, the money is best invested elsewhere.
Some companies just can't get away with meeting or slightly beating the estimates. They must blow out even the whisper numbers to get a rise. Google is one such company.
Google is reaching or has reached maturity. This is just a bit of a storm before the calm.
Many competitors are nipping at Google's heels. Never mind Facebook and Twitter, even Bing seems to be gaining market share at the expense of Google's traffic, albeit slowly.
Google did just abandon (and rightly so, but that's another discussion) the world's most populous country with the most browsers online.
Of course the bet's on Google taking the fall in stride and going on being an enviable company. But one must admit this kind of volatility is music to options traders ears. That is if they're on the right side of the bet.