Google earnings fiasco hurts Internet ETFs
The company's early report release and subsequent trading halt ripple throughout the markets.
At least two exchange-traded funds with large Google (GOOG) allocations were trading lower Thursday after the botched early release of the company's third-quarter earnings and the surprisingly slack results included therein.
The First Trust Dow Jones Internet Index Fund (FDN) was off 1.8% in afternoon trading on volume that was at least 20% higher than usual. The fund, which has $504.6 million in assets under management, allocates nearly 11% of its weight to Google. To be precise, the ETF's weight to Google is 10.66%, which is well above the 7.38% allocated to Amazon (AMZN), FDN's No. 2 holding.
The smaller PowerShares NASDAQ Internet Portfolio (PNQI) was also suffering in the wake of the Google earnings miss. That ETF was off 2.1% on volume that was more than 50% higher than usual.
Shares of Google traded at around $755 at the time of the early earnings release, found in an 8-K filing with the Securities and Exchange Commission, before plunging as low as $676. The company then requested that shares be halted.
Google showed a profit of $9.03 per share, well below the $10.65 per share analysts expected. Google was scheduled to report those results Thursday after the close of U.S. markets. Paid clicks on advertisements Google carried rose 33% year-over-year and 6% from the second quarter.
Revenue was $11.33 billion, well below the $11.86 billion analysts expected. In a sign that Google's most important revenue driver, the paid clicks on advertisements, is slowing, the company said that metric tumbled by 15% in the third quarter from the year-earlier period.
Google's earnings miss also weighed on shares of Baidu (BIDU), often referred to as the Google of China. That stock was down 2.1%. Google and Baidu are PNQI's two largest holdings, combining for almost 16.4% of the ETF's weight. PNQI has $51.9 million in assets under management.
More from Benzinga
- Google Shares Halted Following Earnings Debacle
- Few Ill Winds Boost The Travelers Companies' Third Quarter
- An Obama Victory Could Spark These ETFs
Copyright © 2014 Microsoft. All rights reserved.
An interest rate tease in The Wall Street Journal sends the market into an optimistic tizzy -- but one that doesn't end quite at the top.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.