Friday, November 05, 2004
Ever since briefly trading above $200 intra-day on Nov 3, 2004 Google stock has been under a lot of pressure. UBS which initiated on GOOG with a Reduce rating points to four factors that will keep stock under pressure in the near-term 1) slowing growth, 2) margin deterioration in 2005, 3) increased stock float and 4) mutiple compresion. I think all these factors also mattered at $175 or for that matter at $135 also. The timing on float increasing 233% from approximately 27M shares to 90M shares by end of 2004 matters the most in driving the stock down. Timing is the most crucial part of picking stocks; "you can be right, but can you be liquid?" is one of the most important question to ask.