"Investors have been fixated on Google the past few weeks, as its shares have tumbled nearly 25% from a peak of $475 -- and the fact is, there could be a lot more tumbling ahead. The share price could well be cut in half over the next year as the Internet giant grapples with growing competition from Microsoft and Yahoo!, increased pricing pressures in its online ad sales and mounting concern about what's known as click fraud," says Barron's cover story.
"Google reminds me very much of what went on in 1999 and 2000," says Fred Hickey, editor of the well-regarded High-Tech Strategist newsletter and a member of the Barron's Roundtable. "The valuation is insane, relative to what they do."
Google is great, of course. The argument is about whether its stock -- now $360 -- is worth $500 going on $1,000 or $257 and heading for $188. Well, what do the people running the company think? The article says:
Finally, there's the matter of persistent insider selling. As Google starts to spend the $5 billion it raised through two stock offerings in the past year and a half, its senior executives have aggressively sold shares. Co-founders Brin and Page have each sold more than $1.5 billion of stock. CEO Eric Schmidt sold $493 million. Omid Kordestani, senior vice president of global sales and business development, sold $793 million, and Ram Shriram, a director, pocketed $442 million, according to Thomson Financial.
Granted these folks all continue to have substantial holdings in the company, and most of the sales were part of pre-arranged selling programs that Google asked these executives to establish at the time of the IPO. Still, it's notable that none have purchased shares in the wake of the recent stock pullback. Investors might be wise to follow what they do and not what they say.
Thanks to John Battelle's Searchblog for thel link....
