The past month has seen a lot of activity from internet search giant Google. After years of stagnant share values, I believe investors are willing to give the long-suffering technology company another shot. I am too.
In June 2008, when I turned 18 and opened a trading account, I made the following three trades: I bought some shares of Apple, which was then trading at a paltry $175 per share; I bought shares in an an exchange traded fund which aims to deliver twice the inverse performance of a basket of financial companies (I did particularly well with that one); and, against all better judgment and market sentiment, I bought some Google because I’m a child of the 1990s and was totally mesmerized by its meteoric rise way back when.
Long story short: those Apple shares are now funding my startup until we raise capital; those shares in SKF were sold and the proceeds went toward buying more Apple and other stocks. But I sold Google at a loss. And it was sad times, because I had traded Google since I was 15 and using stock simulation games. Google, the market, whatever it is, had betrayed me. And thus, I’ve avoided Google like the plague for the past two years.
Until yesterday, when I found myself with a few thousand dollars just sitting in my bank account, doing nothing. After much research, a lot of math, and a great deal of hemming and hawing, I am once again a Google shareholder. All seven of them.
Three things prompted my move.
1) People Are Absurdly Excited About Google Plus
Several reports on a number of blogs are making the bold claim that Google+ will have 100 million users “soon”. Paul Allen, now of Ancestry.com, yesterday estimated that the new social network will top 10 million users by today, adding, “More impressive than last week’s growth is the astonishing growth in users from yesterday at mid-day to tonight — a 30% jump. My latest estimate tonight shows approximately 9.5 million users. This suggests that 2.2 million people have joined Google+ in the past 32-34 hours.”
In other news, Google says it will roll out Google+ profiles for businesses by the end of the year, after reports that the company was closing Plus accounts of companies.
2) Google Released A Google Books-Integrated E-Reader Yesterday
As if gunning for Facebook (and, by proxy, Microsoft) wasn’t enough, Google announced yesterday that it is releasing its own e-reader, the iriver Story HD, which will retail in Target stores and online for $139.99 starting July 17 . The device is fully integrated with Google Books, allowing users to access over 3 million books for free and offering paid access to hundreds of thousands more.
The device offers better screen resolution and faster page turning than the Kindle, and like the Amazon device, it is wifi enabled and comes equipped with a full QWERTY keyboard. The iriver Story HD’s most compelling feature is that because most of the content is in the cloud, users can access most e-books online without having to download it to the device, unless the book is copyright protected. A very good writeup of the device can be found on ZDnet here.
Something tells me Amazon isn’t going to be happy.
3) Recent Price Activity
When the markets opened last Friday, a series of very large sell orders knocked Google shares down by almost $15 from Thursday’s close. I watched throughout the course of the day as prices crept lower. Yesterday, after share prices recovered from an early session spike and gradually declined throughout the rest of the day, something just felt right about buying at $526. The math added up too.
Yesterday, July 12th, Google opened at $526, and reached a mid-day high of $535.84. At the time of publishing, shares are hovering right under $535. It will be interesting to see what the next month or so holds for Google. After six years of Google watching, I’m happy to say that I’m bullish on the stock for the first time in a long time. And though everyone says something like what I’m about to say, I think Google’s current march higher is here to stay. Let us hope.