I took a BIG gamble yesterday and bought 10 shares of Google Stock yesterday at about $302 a share just before their 3rd quarter earnings came out. 10 shares doesnt sound like a lot but at $302 per share it was the most I was willing to gamble with on this stock. I figured if the earnings came out really bad I would immediately sell the stock after hours for a small loss. Google has not split its stock like most companies do. A stock split is partitioning the outstanding shares of a corporation into a larger number of shares, without affecting shareholders’ equity or the total market value at the time of the split. For instance, if a stock valued at $100 splits 2-for-1, an investor who owns 100 shares would now own 200 shares valued at $50. Splits usually must be voted on by directors and approved by shareholders.

So what happened:
Excluding $35 million in after-tax stock compensation and a $21 million write-down related to an acquisition, Google reported a profit of $1.51 per share. The analysts’ consensus forecast, excluding one-time items, was $1.36

Google’s revenue for the quarter totaled $1.58 billion, nearly doubling from $805.9 million last year. After subtracting the commissions that Google paid to other Web sites in its advertising network, the revenue stood at $1.05 billion, exceeding the Wall Street estimate of $944 million.

As I write this, Google’s stock sits at 348.61 a share premarket, Up 45.41 or 14.98%
The stock will likely to continue to go up today because of all the people that shorted the stock. When someone shorts a stock [sometimes called “selling short”], they borrow shares of a company from an investor and sell those borrowed shares at the current market price. The hope is that the stock price will fall so the short seller can repurchase the stock at a lower price and pay back the person they borrowed from. These short sellers will sometimes buy the stock to try and cover their losses.

Google’s new price target has been raised to $450 by at least 3 firms now.

Great news huh! Not all is rosy though. I also own shares of Caterpillar which did not have great earning and is currently down 7% premarket and overall, October has been pretty bad for stocks.

But this post is about Google, and I am darn happy with that Gamble.

GO GOOOOOOOGLE!

Posted by Schroeder on Friday, October 21st, 2005 at 8:51 am.