Thursday, March 23, 2006

Google (GOOG)

Standard and Poor's just announced that Google (GOOG) will be added to the S&P 500 Index as of the close on Friday, March 31st. This is big news, and has the stock +$25 in after hours trading. This is because the index managers need to buy shares of GOOG to rebalance their funds.

I don't know how many shares of GOOG these index managers need to add in total, but I think it should be enough to keep a strong bid under the stock into quarter end.

long GOOG


At 5:28 AM, Blogger Trading Nerd said...

I would imagine that now that the anticipation (of Google going into the S&P 500) trade is over, traders will be able to short the stock without having to worry about the slightest rumor of Google being added to the S&P 500 running them over.

It wouldn't surprise me if this stock closes lower on the day (although I'm not predicting that).

For the life of me, I can't figure out why seemingly intelligent people buy this stock for the long-term (unless they are buying Google with the plan of selling it to some other fool for a short-term gain [Greater Fool Theory]).

My beef with the stock isn't so much its valuation (yeah, it's ridiculous, but I guess that it's within the realm of possibility that Google's earnings could cause Google to grow into that PE). My problem is those B-shares. Those B-shares should cause Google to trade at a discount, not a premium, to its peers.

Thankfully I am not short Google (I like to wait until a couple of days after options expiration to see how a stock "acts" and, quite frankly, Google has held up nicely over the last couple of days, so I stayed away), but I just might short the stock today.

At 7:26 AM, Blogger J. Kahn said...

GOOG has continued to climb, and this mornings market share figures look strong. I am not looking at GOOG as a long-term investment, but I did feel that under $350 it offered a nice trade.


Post a Comment

<< Home