Another day, another big drop in Google shares. Another day, and more head-scratching for Apple shareholders.
For Google , it's getting ugly. Even a big, broad Wall Street rally couldn't help these shares, ceding another 4 percent on Monday with the slide continuing pre-market today. This was a $747 stock on November. Since then, a 40 percent blood-bath and no sign that this is going to turn around any time soon. Talk to people inside Google and they're not concerned, at least not publicly. But the swagger there is noticeably diminished and I'm not sure that's such a bad thing.
The Microsoft play for Yahoo is a big unknown; YouTube's vulnerability after the bizarre Pakistan incident over the weekend(Update: Pakistan has since lifted curbs) is a big unknown; patent and copyright litigation are big unknowns; same goes with the direction of the economy. And the Street hates unknowns.
Trouble for Google is, as I've written before about the broader economy: investors run the risk of creating a self-fulfilling prophecy when it comes to driving these shares lower.
Sure there are lots of "unknowns," but what we do know is that Google remains a money-making machine the likes of which we really haven't seen before. Unfortunate that fundamentals have given way to fear. The euphoria around Google is gone, and that's ok. A year from now I think investors will look back at Google at these levels and wonder why they didn't pull the trigger to buy so low.
I welcome your comments about this. Let's get a dialogue going! How do you feel about Google? I'll post some excerpts as I get them. Let me know your thoughts. You're not alone.
I'll address the similar, but even rosier outlook at Apple in an upcoming post shortly,and include some of your recent comments. If you're feeling fear and frustration, believe me, you're not alone. I'll have that one shortly.