The stock price of Google Inc. crossed the US$500-mark on Wall Street on Tuesday.

The stock price of Google Inc. crossed the US$500-mark on Wall Street on Tuesday.

Published: 21 Nov 2006

The stock price of Google Inc. crossed the US$500-mark on Wall Street on Tuesday.

As per the information available, in early trading yesterday, Google’s share price rose by $9.21 to $504.26, giving the company a market value of $154bn (£81bn) - higher than the capitalisation of Chevron, IBM or Intel.

The share was priced at $85 when the company went public on Nasdaq in August 2004. Three months later the shares reached $200 and in November last year they hit the $400 mark.

“Investors have questioned whether Google's growth of revenue could catch up with its soaring stock price, as the company is still dependent mainly on incomes from online advertising service in an highly competitive market. Some even warned an Internet stock bubble, just as the one the market saw six years ago when dotcom companies' stock prices collapsed amid investors frustrations,” reported media. “ But many Wall Street analysts seem confident that Google will only generate even more profit from its dominant position in the Internet search and advertising market.”

According to the financial information firm Bloomberg, around 33 analysts who follow Google still recommend buying shares. Four rate the stock as a “hold” and only one is advising clients to sell. But some began to urge caution yesterday. Scott Kessler of Standard & Poor's in New York reportedly said: “A lot of the rewards are already priced into the shares. Now people should start thinking about the risks.”

At $500 a share, analysts say the company is valued at 37 times its likely earnings for next year. By comparison, Microsoft’s ratio is 21 times future earnings.

“The most famous beneficiaries of Google’s inexorable rise are Larry Page and Sergey Brin, who are now worth more than $15bn each. Eric Schmidt, their chief executive, is worth $6bn. But there is still plenty left over for hundreds of other Google workers, all of whom have become millionaires,” reported media.

“The search giant’s shares now trade on an earnings multiple of around 62 times, more than double the average of S&P’s technology index, but the company has beaten market expectations in all but one of the past nine quarters, and many analysts have price targets of $600 for the stock,” it is being said.

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