Analysts Are Seeking Guidance From Google 119
Carl Bialik from WSJ writes "Following last quarter's disappointing earnings, Google's annual analysts' day this Thursday is shaping up as a test of the company's reluctance to provide financial guidance -- and of investors' tolerance of that tight-lipped approach, the Wall Street Journal reports. 'Now, Google watchers expect analysts to bring tough questions on Thursday and to pressure executives for answers that might give analysts greater confidence in their forecasts,' the WSJ reports. 'There's no reason to believe that Google will yield to any such pressures.' However, 'There is one recent sign that the company aims to be more analyst-friendly. Company representatives earlier this month solicited analysts for input on what investors wanted to hear about on Thursday, according to a person familiar with the matter.'"
Google Pool (Score:2, Insightful)
Re:Google Pool (Score:2)
Re:Google Pool (Score:2)
They exist at the whim of the shareholders, but they are not required by law to increase their wealth. This is fact if only for the fact that it would not be enforcable. If none of your shareholders care that it's not making money, how can any government step in and force them to do so? What if the reason they don't make any money is because they're donating all of the money to charities?
If public companies are required to make
Re:Google Pool (Score:1)
About time.... (Score:2, Insightful)
I can sort of understand why some people thought they might do something wonderful early on, but come on. It's been too long and they have virtually nothing to show for it other than grandeous rumors from morons like Cring
Re:About time.... (Score:5, Insightful)
Re:About time.... (Score:3, Insightful)
And that job would be?
As far as I know, other than a few shares squirrelled away for future needs and the options for its employees, Google has no particular reason to make its share price go up any further than it is now. Nor is it clear that releasing quarterly estimates would help them to do so.
If they were smart, they'd do even more to decouple themselves from the "market" and tell the "Street" to s*ck it. Replace
Re:About time.... (Score:2)
I think you have this backward. For Google to "get out of the market", they would need to buy back their shares, not sell them. Before the IPO all the shares were owned by the company's founders; to return to that stat
Re:About time.... (Score:1)
Re:About time.... (Score:2)
I can sort of understand why some people thought they might do something wonderful early on, but come on. It's been too long and they have virtually nothing to show for it other than grandeous rumors from morons like Cringely that never materialize.
That, and nearly $2 billion in profits, anyway.
Re:About time.... (Score:4, Interesting)
No, no, no (Score:1, Interesting)
And your premise (actually, the premise of the entire story posting) is way off. Google's performance was decidely not lacking. They did very well. They just didn't do as well as many expected. If you transferred their numbers over to virtually other company, normalizing for size, the in
Re:About time.... (Score:1)
Gmail shows ads.
Google Video has for-pay content.
Google Maps (now Google Local) shows ads.
Google News (and other ad-free services) don't make money directly, but arguably these extra services increase their brand and the likelihood people use Google for other services they do make money from.
Given they don't break out the profit on a per-product basis, and we don't know the extent that other products (like News) really do help, it's har
Re:About time.... (Score:2)
Woah, when did Google and Y! merge?
The analysts skepticism is warranted... (Score:1, Funny)
Re:The analysts skepticism is warranted... (Score:1)
Enron Executive: "We can't use this, they don't let you delete anything!"
They deserve it (Score:5, Insightful)
Re:They deserve it (Score:1)
Enron lied to analysts, google won't talk to analysts. Both companies show very little respect for teh average stockholder. The only difference is that google's motto is "do no evil," so it isn't unreasonable to expect more from go
Re:They deserve it (Score:4, Insightful)
How is not talking to analysts disrepectful to the average shareholder? The average shareholder doesn't have time or sometimes even access to read analyst reports, those are mainly used by the big-pocket investors.
Google's way of doing things is to release it all in a sometimes surprising earnings report. Sure, the stock tumbles when they miss the baseless estimates, but just wait to see how much it jumps when the baseless estimates come in too low.
Regulation FD (Score:2)
Regulation FD requires that any information that a company gives to anyone, including analysts, must be provided to all investors. So if Google is not talking to analysts, it's not talking to anyone. Perhaps many individual investors don't have time to research into Google's statements, but to n
Re:Regulation FD (Score:1)
Re:Regulation FD (Score:2)
Re:They deserve it (Score:1)
Re:They deserve it (Score:5, Insightful)
Enron lied to analysts, google won't talk to analysts. Both companies show very little respect for teh average stockholder. The only difference is that google's motto is "do no evil," so it isn't unreasonable to expect more from google.
And more is exactly what Google is giving. What's good for the analysts isn't necessarily what's good for the stockholders. And it's not like Google is the only company which refuses to provide financial guidance. Most likely they got the idea from a company you may have heard of called Berkshire Hathaway - a company whose stock has grown to over $85,000 a share.
Re:They deserve it (Score:2)
OTOH, it's great marketing for BH to have a very high stock
Re:They deserve it (Score:2)
The very high share price of BH doesn't mean that the company is inherently great, nor that witholding profit guidance is a good thing
You're right of course. But that doesn't change the fact that the company is inherently great, nor that witholding profit guidance is a good thing.
More on-topic: generally, there are two kinds of company that withold profit guidance. There are good companies, like BH, and there are companies that are trying to hide Very Bad News. The latter outnumber the former by a hug
Fast reactions (Score:5, Insightful)
The long term investor is quite content to wait till the quarter is actually over before finding out how well the company did.
Having said that, Google's price is still too high.
Re:Fast reactions (Score:3, Insightful)
Yes and no. It, sort of, has no effect on the long term average price. And I have no sympathy for analysts playing guessing games and racing to get their estimates out.
But it does have an effect. It affects the average variance of the stock. If the long term investor is going to release stock one day, it is preferable to have a lower variance. For an investor to be indifferent between
Re:Fast reactions (Score:1)
Responding to several things at once:
This:
Should be Return Code 42.
Re: Google's price too high? I think it's not just some future expectation and certainly not what someone believes the be the current value (or value in the next six months).
There's too much "peer pressure" in society to buy Google. People who are innumerate and can't figure out why their PC is broken because they unplu
Re:Fast reactions (Score:2)
U.S. Chamber opposes quarterly guidance (Score:2)
Re:They deserve it (Score:1)
Analysts have very little to do with a company respecting the average stockholder. In Enron's case, the analysts were atleast half as at fault as the Enron execs (Enron only did like 40% of the damage, there were others like banks/investors, a lawfirm, an auditor, and the an
Analysts are a scam (Score:1, Interesting)
I loved the tone of a previous Google/analyst call, where the Google's tone was basically
Re:They deserve it (Score:2)
Because the truth is, as long as they where making MONEY on Enron, they where perfictly happy. Wall Street folks are basically whores in $2000 suites.
Re:They deserve it (Score:2)
I read Conspiracy of Fools and realized how true it is.
I hope Google tells them where to go (Score:2)
I hope google tells them to crawl back into their caves with their pet mammoths.
Of Course (Score:2, Insightful)
"Could you outline all of your secret projects, and everything that you do not what your competitors to know about?"
On the other hand, the tight lipped approach seems to have worked well for them, giving them a certain strategic advantadge. Other wise Microsoft would get wind of their IOS project. y'know, the secret Internet Operating System project.
What? they haven't said anything about this?
ooooops. nev
Re:Of Course (Score:3, Insightful)
you aren't interested in the girl you know everything about.. you aren't interested in the girl you've seen naked..
you're interested in the shy, complex girl who you don't know anything about. she's quiet, and always wears those clothes that cover up the curves that you know are just under there somewhere...
plus, theres always the addage of "if you're thought a fool, it's best to keep your mouth shut than open
Re:Of Course (Score:1)
Don't really care if she's shy or not as long as she rocks the hot boyshorts.
Re:Of Course (Score:4, Insightful)
Re:Of Course (Score:2)
I for once would continue the under promise and over deliver angle
Re:Of Course (Score:2)
Re:Of Course (Score:1)
If I were in charge of a company like Google, I would love to have 'analysts' ask me questions like this. It would be so much fun watching them react to all of the misinformation I would feed them.
Re:Of Course (Score:1)
That's illegal.
So let me get this straight... (Score:5, Interesting)
What gives?
Re:So let me get this straight... (Score:4, Insightful)
And in the end, it really doesn't matter to the Google executives and the long term investors. Google already received its investment. Going forward it's just a matter of a zero-sum game among the traders (actually less than zero-sum if you include commissions).
For the long term investor, this quarter to quarter stuff is meaningless anyway. Where is Google going to be in 10, 20, 50 years. That's what matters to the long-term investor, and that's what the Google executives want their investors to focus on. Hey, it works for Warren Buffet's Berkshire Hathaway (Buffet most likely being the influence for this decision as well as the decision not to split).
"And when a CEO makes a pronouncement--even one that's largely based on hopes and guesses--employees will use whatever means necessary to make it come true. If earnings are supposed to be $1 a share, they will be, even if it takes some creative accounting. That's one reason Warren Buffett refuses to provide financial guidance at Berkshire Hathaway and why he has encouraged other companies on whose boards he sits, such as Coca-Cola, to give up the practice." - http://money.cnn.com/magazines/business2/business2 _archive/2005/11/01/8362824/index.htm [cnn.com]
Re:So let me get this straight... (Score:1)
Just a nitpick, google for "zero sum stock market". Zero sum is a common misconception wrt wealth creation and market capitalization.
Re:So let me get this straight... (Score:2)
Re:So let me get this straight... (Score:1, Flamebait)
It sure didn't seem like you were fully aware of this in your original post. I was about to write the same reply to you.
But thanks for making us fully aware that you're an asshole.
Re:So let me get this straight... (Score:1)
It sure didn't seem like you were fully aware of this in your original post. I was about to write the same reply to you.
Well, I never claimed to be an eloquent speaker. If you misunderstood me, I apologize.
But thanks for making us fully aware that you're an asshole.
LMAO, you're as bad as the other poster. If you're going to accuse me of being an asshole, maybe you could explain why you think that.
Why do I feed the trolls? Oh well...
Re:So let me get this straight... (Score:1)
Re:So let me get this straight... (Score:2)
While Google Execs are likely to remain long term owners, price fluctuations may affect when they sell of a small portion of their stock if they want to pay for a new mansion or whatever.
Re:So let me get this straight... (Score:2)
Re:So let me get this straight... (Score:2)
Unfortunately it's the quarter-to-quarter traders who of course influence price.
I'm not sure that's really true. You could probably convince me I'm wrong there, though.
If you can't attract the quarter-to-quarter traders, the price will suffer greatly (they are the ones who will buy whenever a long-term investor is looking to cash out, such as for paying for a new home, retirement, liquidating some cash to diversify their portfolio, etc). As a result, it makes the stock less attractive to long term inv
Re:So let me get this straight... (Score:5, Insightful)
Indeed, and that backlash really smarts, I have to say on a personal note.
Anyone given any consideration that the downgrading of the stock by the analyst community might be a deliberate act of passive-aggressive punishment? Give us access or we destroy your rep on Wall Street? As I said, passive-aggressive; it's not that they slander the company, it's that they won't buoy it up by the usual flim-flam good press they give to the reputations of companies that toe the line and let the analysts get inside info they can use to make themselves very rich. Very, very rich.
Google has my respect if they are resisting those thieves. But they are paying a dear price. So am I, ka-ching.
Analysts want to game a company's activities to produce high short-term profits that will enrich the casino on Wall Street. Google is right. The best way to produce value to your shareholders is to grow a company over the long haul, even if it sacrifices short-term cashouts for the inside traders.
How many companies would still be in existence if they hadn't squeezed themselves dead to satisfy the expectations of those horse thieves?
Re:So let me get this straight... (Score:2)
It's well established that analysts give better ratings to companies who produce predictable earnings results. Since Google is not providing its own guidance on the future, it's to be expected that it will receive a lower average analyst rating as a result.
The best way to produce value to your shareholders is to grow a company over the long haul, even if it sa
Re:So let me get this straight... (Score:2)
So, who pays these analysts to sit on their ass? (Score:1, Funny)
If they want their questions answered.... (Score:5, Funny)
Re:If they want their questions answered.... (Score:1)
Secrecy as a Strategy (Score:3, Insightful)
Re:It's just in their blood (Score:1)
Earnings Schmernings... (Score:2)
They've got no reason to start coughing up info.
Re:Earnings Schmernings... (Score:2, Interesting)
Google: The Un-stock (Score:2)
So, now, what law says a company has to provide earning guidance? Google wi
Re:Google: The Un-stock (Score:1)
At one time, you needed them to run things, set the price etc. The internet changed that.
And anyone who goes into something based on numbers, without asking how the numbers got there is an idiot. But I've met a lot of investors who bought into companies because they were going up, not because the fundamentals were any good.
The analysts' big secret. (Score:4, Insightful)
I need to get a job like that.
Re:The analysts' big secret. (Score:1)
As opposed to: "Analysts are so full of shit. They act like they 'analyze' and make predictions, but in fact they don't even talk to the companies they're researching. I need to get a job where I can rake in the cash by rolling some dice."
Re:The analysts' big secret. (Score:1)
Dear Wall Street (Score:2)
Have you tried going to http://www.google.com/ [google.com] and Googling for guidance? It has been a source of much guidance for me. If you can't find it there, then you're SOL and it probably doesn't exist.
Amazing... (Score:2)
Google shouldn't provide guidance (Score:2, Interesting)
Google, following true Warren Buffett style, have so far refused to give guidance and I think this will continue.
The problem with giving guidance is it can distract management by putting the focus on meeting short-term estimates, which can be at odds with creating long-term guidance.
For example, let's say you run a company and you've put a number o
"Analysts Are Seeking Guidance From Google" (Score:1)
Re:"Analysts Are Seeking Guidance From Google" (Score:1)
Analysts Are Seeking Guidance From Google (Score:1)
You expect dumb things... (Score:2)
The retarded analysts gave insane expectations of Google (remember the $2000 a share thing, one said they'd be making many more billions than they are now), and then got all upset when Google, despite doing exceptionally well still, didn't meet those expectations. Duh! What'd you expect? Google is still growing very fast, and is now bigger than Yahoo! in terms of revenue, and just short of Yahoo! in profit.
Re:You expect dumb things... (Score:2)
1. After being shut out, raise the stock price projection to infinity-plus.
2. After Google doesn't reach $2000 a share, declare it a failure.
3. Dogpile! Mysterious amount of bad news about Google's mistakes start popping up everywhere. (I think you've all noticed this? 100 to 0 in 3.5 seconds? I mean, come on.)
4. Stock price plummets. Analysts can give this a nice helping hand
5. Analysts start buying up stock when they judge it hits bottom. They have a great deal of control
Re:You expect dumb things... (Score:2)
In case you haven't noticed, Microsoft isn't accumulating cash these days. Instead, spending all operating income buying back shares dumped by Bill Gates and otherwise issued to employees.
Re:You expect dumb things... (Score:1)
How everyone involved makes money... (Score:2, Informative)
Investors: make money by purchasing a stock, holding it for a "long term" (investor defined, but usually over years), and sells it at - hopefully - a higher price while making some money along the way in dividends. (See Benjamin Graham). Google respects them just fine, as they have an interest in the value of the company.
Traders: make money by buying/selling shares over the short term. Google's not so much worried about them as they a
Crazy talk! Google is a winner... (Score:1)
Google had its own mini-bubble - it was over-bought by people who pushed it's P/E to 100. Now they've figured the PEG (growth) isn't so pretty as before, so the P/E is dropping to something a little more earthly.
The following factors mean Google is a long-term win:
Re:Crazy talk! Google is a winner... (Score:2)
A friend of mine just got new Fujitsu laptop and it came with all the Google stuff preinstalled.
Re:Crazy talk! Google is a winner... (Score:1)
Woohoo (Score:2)
The best part is the statements that Google is helping Analysts by asking what they want to hear...
That doesn't sound Enroney.
Now I think Google is doing many excellent things, but the possibility of another
I hope everyone investing remembers that the current Google stock price is based on their UPCOMMING inventions and businesses when those inventions and businesses start the price shouldn't change.
"do no evil" = "do nothing"? (Score:1)
Why don't you just tell me the name of the movie (Score:1)
Sounds like these analysts.
They've had a go at actually doing the hard work of coming up with estimates and they were way off on their projections (as anyone who has done financial modelling and forecasting will tell you, that
Buy more Stock! (Score:1)
Google says, "Buy more Stock!"
Google is a bit young... (Score:2)
I don't believe that companies should *have* to give out expectations and forecasts for the coming months to the public, however, Google is still a young company, and while they've had quite a ride at the outset, there are sides of Google still to be determined. Specifically, is Google the kind of company that paints a rosy picture to the world while in fact internally things are going somewhere war
On responsibility (Score:1)
If you estimate a stock too high, such as what happened in the Internet bubble, you can ruin the lives of millions of innocent investorsm and even go to jail yourself.
If you estimate it too low, you can destroy jobs, prevent companies from getting access to the operating capital they need, and even alter the course of history by preventing the exploitation of technology or resources.
What makes it even worse is that there is a
Re:On responsibility (Score:1)