Big Day for GOOG and AMZN
(Disclosure: I'm long both for at least the next day)
Today after the close, Internet behemoths Google and Amazon release their fourth quarter numbers. If pre-market action is any indication today, folks are expecting the numbers to be good (GOOG is up $30 and AMZN is up $6.50 pre-market). And this on a day when it was red numbers across the board in the global markets leading up to the open.
Google had some fairly shocking news late yesterday which I thought would have a negative impact on the stock, but apparently not. Two years (almost to the day) after buying Motorola for $12.5 billion, Google is selling it to Lenovo for $3 billion. That's a pretty significant hit, even for the GOOG. But when you think about what they're actually selling, I can see why it's a positive in the long run. Being in the handset space was causing all kinds of problems with their Android partners like Samsung, and the real crown jewel in the Motorola acquisition was all the patents held by Motorola - which Google is keeping and not passing on to Lenovo.
The expectations for Amazon border on the absurd. Consensus is calling for revenues north of $26 billion for the quarter, or better than an 18% increase over the same quarter last year. It's anyone's guess how much of that (if any) will fall to the bottom line, but AMZN is one of those rare cases where that hardly seems to matter.
In short, the street is expecting monster quarters from both companies and the opportunity to disappoint is huge. In Google's case especially, things got so out of hand after their last quarter's numbers that it hard to imagine them beating that. But who knows?
I'm personally taking a pretty cautious stance on the whole thing, because I don't trust this market as far as I can throw it - especially with all the recent EM malaise. To that end I've sold calls that expire tomorrow against my positions at a hefty profit, so if they beat and the stocks take off I'll be in cash at tomorrow's close. If they disappoint and drop then I pocket some redonkulous premium and keep the stock.
We shall see...
I think this NYT article gives a pretty good breakdown of the Lenovo deal from Google's perspective:
http://dealbook.nytimes.com/2014/01/29/did-google-really-lose-on-its-original-motorola-deal/
AMZN has a major key advantage. People like to save money, therefore as long as AMZN can keep the doors open people will like AMZN. Therefore people will invest in AMZN, keeping the stock trading at stupid high ratios.
I'm amazed you didn't mention Facebook in there too Eddie. I hadn't been really paying attention to the stock, but the thing's popped like crazy since yesterday. And who could blame 'em too, the money they generate from their click for content and (apparently) mobile is insane and growing. I still have my doubts as I'm not convinced they can move past being a social media fad, but it's impressive none the less.
I actually just noticed FB a second ago. Jesus.
Trade AMZN like you traded gold for the last four years....the volitility is mostly based on emotion. Trade other people's fears/greed. The company has huge big picture potential but as of yet the net revenue isn't really enough to justify the current price.
GOOG on the other hand is raking in the money and is only going to keep growing, and I'd venture that the stock price is definitely cheap if you have the long view in mind.
Okay, so GOOG announces pretty much right on the money, and AMZN throws up a big miss. GOOG is flat after hours, while AMZN is getting hammered - down $32 a share at the moment. Looks like I'll be hanging on to my AMZN.
And of course, goddam Chipotle posts a ginormous beat and that crazy stock is up another fifty bucks a share after hours. Unstoppable.
This is a company to watch. If their new Asian spin off tanks look for them to come crashing back down.
YEEEEEHHHHHHHHHHAAAAAAAAAAAAA!!!!!!!!!!!!!!!!!
I was thinking AMZN would be up at least $50 on such horrible news. What's wrong?
Chiptle stradle, mmmm, delicious
Something lit a fire under GOOG, because now it's up fifty bucks a share. Guess I have a decision to make tomorrow.
AMZN is clawing its way back, too. Now it's only down $16 a share. I need that one to stay under $392.50 tomorrow.
Good CALL on Amazon.. hehe
Harum placeat maxime ducimus voluptatum. Id odit et quasi hic molestias odit. Voluptate consectetur vero qui quia. Iste quibusdam alias provident necessitatibus corporis necessitatibus praesentium dolorem.
Aspernatur excepturi provident sint qui dolorum in. Sapiente eligendi doloremque est quibusdam. Veritatis dolores velit corrupti dicta voluptates.
Minus tenetur corporis rerum enim voluptatum. Ipsa quasi non hic consequatur amet praesentium.
Tempore repellat et commodi eos et. Id incidunt perspiciatis sed provident. Quasi sit voluptates nobis sit aut enim quidem. Voluptate dolorem enim ex sint qui dolorum. Inventore non id iste omnis magnam et. Quas consequuntur atque voluptatem ad.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...