Analysts said this proved three things: That investors had reposed confidence on Google as a company and on Larry Page as its CEO, and that there’s hope in the short-term for tech companies.
Yesterday’s milestone was reached five years after Google’s shares had hit US $700. In fact, compared to its wishy-washy performance last year, in the near-two months of this year, Google’s shares have gone up by 14 percent, much to the delight of its shareholders. Coincidentally, Apple shares have fallen by the same percentage this year. Google watchers said the fact that Google's stock closed at US $806.85, Tuesday only showed the Internet technology company was doing well for itself.
Google, which went public in August 2004, is today a US $266 billion company, making it the third-most-valuable in the Standard & Poor's 500, behind only Apple and ExxonMobil.
One of the reasons given for yesterday’s high performance could be the announcement by Google of launching a chain of retail stores soon like Apple. The other could be that much of Google's regulatory issues have been resolved amicably. Also, Android is set up to feature Google's search engine and other services, giving the company a chance to sell more ads, which investors felt, augurs more and sustained business for the company.
So, what next? If you are a Google shareholder, listen to this carefully. Google shares are presently over-valued by 8 percent but there’s near-unanimity in the investing community that the shares will touch the US $900 sometime this year. In the short-term, though, Google shares may see a withdrawal in the next couple of months but analysts are advising investors to hang on.
The Mountain View, California, USA based company had hoped to split its stock last year but was forced to put it on hold until it resolved a shareholder lawsuit alleging that the stock split unfairly cedes too much power to Page and fellow co-founder Sergey Brin.
[Image courtesy: Google]