Google did not miss anythything, analysts did poor guesswork .
Google missed analysts' earnings estimates for the sixth quarter in a row on Thursday, despite the fact that its actual performance for the three months ending on March 31 was more than respectable. As usual, one has to wonder whether Wall Street isn't being just a bit over-optimistic about the online ad-slinger's prospects. …
Friday 24th April 2015 06:36 GMT petur
The real Evil
If you have to complain the profit isn't rising fast enough, you're greedy. Point.
You're not complaining that there is loss.
You're not complaining that there is no profit.
You're not complaining that there is not enough profit.
You're not complaining that profit isn't rising.
No, you're complaining it doesn't rise fast enough.
Friday 24th April 2015 09:52 GMT fandom
Re: The real Evil
"No, you're complaining it doesn't rise fast enough."
And, therefore, the shares aren't worth as much.
And it is not really about complaining, it's more about:
Ok, with the estimates I had, I calculated a fair value for the shares of XXX$, with the new data just released, my estimated fair value for the shares is XXX - 50$, since it is now higher than that I am selling.
Friday 24th April 2015 09:14 GMT auburnman
Something occurs to me: would it be possible (in terms of navigating the legal hurdles) for companies to hedge against Wall street manipulation by publicly publishing a strategy of share buying/selling at set prices?
e.g. "We at ChamChung believe our company is worth $XBn, which corresponds to a share price of $100/ share. We will therefore automatically buy up our own shares trading under $80/share and sell shares when buyers are offering in excess of $120.
I realise no-one would ever actually do this due to executives usually having vested interests in the Wall Street shenenigans and not wanting to admit when your company is tanking, but would it be a feasible thing to do without being accused of insider trading or somesuch?
Friday 24th April 2015 10:05 GMT fandom
There is this thing call buybacks in which a company buy it's own shares, which increases the Earnings per Share and is meant to raise the stock price.
Historically management haven't been too good, on average, at deciding where to buy, they usually buy shares back when they are too expensive. Dell used to be a good example of that.
Besides what you propose seems to be a good way to bankrupt a company, let's say management offers to buy at 80$. Well ok, but then a crises comes for whatever the reason and their is a sell off in the stock market.
The company has two options either they buy all the shares until they run out of money or they have to reduce the price at which they are willing to buy, in which case they would set up an alarm and more stockholders would sell, and they would run out of money anyway.
And if there a time of economic bonanza, they would need to raise the price not to sell too cheaply but then, the stock market does that already.
And when the bonanza ends, as it always does, it triggers the sell off, which bankrupts the company.
Friday 24th April 2015 10:09 GMT Kristian Walsh
You've described roughly how the European Exchange Rate Mechanism used to operate - you price a thing (in your example a share; in the ERM, it was a national currency) within a band and defend that valuation with buy-backs and sell-offs.
While this sounds fine in principle, the weakness is in where you set the upper and lower thresholds. Unfortunately, a company's (or government's) estimation of their value is often wildly at odds with reality. Famously, in the early 1990s, the British insisted that the UK Pound should never be worth less than 2.70 Deutschmarks, a valuation whose only justification could have been "who won the bloody War anyway?", as balance of trade, inflation, employment and other real measures at the time said that the real value should be much, much lower (and the German Bundesbank, which as the largest ERM partner, would be obliged to defend the Pound as well, agreed)
By 1992, currency speculators, most prominently George Soros, decided to call the British Government's bluff. The result was known as "Black Wednesday": after a chaotic week of ever-increasing interest rate moves, the UK finally admitted defeat, withdrew from the ERM and de-valued the Pound to a value supported by reality.