Google shares dive in disastrous day
Trading is halted for hours after the company's earnings are released early accidentally. Other Internet stocks fall in response.
The company said that its financial printer, RR Donnelly (RRD), released the information early without authorization. Investors panicked at the early notice, taking shares from about $754 to as low as $676. Google responded by requesting that shares be halted, and they were for more than two hours. Shares resumed trading in the afternoon and closed down 8% to $695.
Google execs didn't have much to say about the fiasco in Thursday afternoon's earnings call. "I'm sorry for the scramble earlier today," said Larry Page, whose voice was unusually raspy after a bout of illness. "We had a strong quarter," he added. "I'm really happy with our business."
Investors, however, did not feel the same way. The search giant's profit fell to $2.18 billion, or $6.53 per share, from $2.73 billion, or $8.33 per share, a year earlier, according to the filing, which was mistakenly posted on the SEC's website. Excluding one-time items, profit was $9.03 a share, widely missing the $10.65 per share analysts expected.
Revenue rose to $14.01 billion as Google reaped the benefits from the acquisition of Motorola Mobility. Excluding traffic acquisition costs, the fees paid to Google's partners, revenue was $11.33 billion -- far below the $11.86 billion analysts expected.
The results had plenty of worrisome items. The average cost per click fell by 15% from a year earlier and declined 3% over the second quarter. Traffic acquisition costs rose to $2.77 billion, equaling 26% of revenue, up from 24% in the third quarter of 2011. The company reported total costs of $11.4 billion versus $6.67 billion a year earlier.
Google wasn't the only stock hurting. RR Donnelly, the financial printer that released the information early, saw shares fall a bit less than 1%. Facebook (FB) shares closed down 4.6% and Apple (AAPL) traded down 1.9%. Curiously, one of Google's more interesting competitors, Yahoo (YHOO), was barely affected, and saw shares close down 0.6%.
Jonathan Berr does not own shares of the listed shares. Follow him on Twitter @jdberr
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And it all happens in minutes. And as usual, the Mainstream Media has no idea why it happens this way. Welcome to the new step function market action. Looks like GOOG is taking a bunch of other hot money stocks with it too, i.e., Facebook, APPL, etc. The hedge fund hotel is on fire. So much for all that liquidity those HFT algos supposedly provide.
Can’t someone post a pic of the mushroom cloud over Stamford, CT?
Surely someone captured a video of one of those babies trying to “Actively Trade” their way to profit through this step function collapse using their whip-smart tools from the eTrade website. I would love to see that. I got a feeling there’s going to be a load of diapers getting washed tonight.
Barring that, can someone at least post a pic of the mushroom cloud over hedge fund hotel in Stamford, CT?
Let’s hear it for High Frequency Trading liquidity. I bet I know which side of this collapse they were trading on.
P.S. That's why it happened.
Goggle's disatrous day???!!! what 'bout America's disatrous 4yrs under the uber-marxist obama regime!!! well a few more wks and they're history,
look! look at the horizon lib whackos! see those ominus dark clouds, they're coming for you! a storm of biblical proportions is coming closer and closer to wipe out you and the democrapic party in general. oh the cataclysm looming is something you're not even gonna believe!!!
to put it simply for you so-called intellectuals aka blithering stalinist idiots, you're Dorothy in the Wizard of Oz and the Romney campaign is the gigantic twister blowing her house into oblivion and beyond, not only is obama done, finished, completed, over and done, stick-a-fork-in-his-commie-azz done, but the democrapic party in general will be shattered, decimated, annihilated, because this election encompasses more than just the presidency and everybody knows it, and yet nobody speaketh this truth, everybody's all hell bent on the latest polling data and what it means, BULLSHIIITT!!! I don't need a poll to show me what's a comin' hehe
SRT DRIVER' I don`t know what planet but we`ve never had it so good.Our business is growing
the market is up 66%, 1 war is over and the other ends in 2014.Bin ladenis dead and GM
is alive and well.We have 31 straight months of job growth.Wake up and smell the
coffee, these are the good ol days.
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