Google unveils a new social networking strategy – and investors embrace yet another reason to jump-start the company’s stock, which broke through the $700 barrier yesterday – less than a month after cracking through $600.
Dinosaur Research analyst David Garrity is so enthused, he has raised his target price to $985. Google now has a market capitalization of $220-billion – making it the fifth-most valuable company in the U.S. (Hat tip: Silicon Valley Insider)
A couple of questions:
How long will it take Google to hit Henry Blodget’s $2,000 target? When he came out with it a month or so, it drew a lot of criticism but maybe Blodget understands the madness of crowds. Maybe he got lucky during the dot-com boom with he predicted Amazon would hit $400, but Google is a different beast. If Google Q4 numbers are strong and it provides any hint of a strong 2008, watch out. Last week, Google CEO Eric Schmidt suggested there was lots of runway left for growth.
And while Google’s valuation (15X sales) can be perhaps be justified iven its dominance and growth prospects, does it really make any sense that Facebook is worth $15-billion? Come on, we’re talking about a company with revenue of $150-million.
Sure, it has more than 30 million users but who knows how well all those people can be monetized through advertising. I would argue that for all the target about Facebook being able to target its users, Facebook-ers are a fickle bunch that will be challenging to pin down.
More: The NYT’s Bits has some thoughts.
Technorati Tags: Facebook, Google, Henry Blodget
2 Comments
Mark:
Your recent posts on Google and the reference to Blodget’s $2,000 target only fuel the speculation that this is a reasonable target. Rational analysis says otherwise. To even imply there is any validity to Blodget’s $2,000 target indicates that the Bubble is alive and well. Investors, watch your wallets…
Hey, don’t shoot the messenger.
I don’t own Google but lots of people want it these days. Who’s to suggest Blodget’s target isn’t valid given how the stock has performed? Rational analysis may say otherwise but who’s looking at fundamentals these days.
You’re right; it’s very much a caveat emptor market.