Google dips below $500 for 1st time

February 4, 2008 3:21:34 PM PST
Shares of Google Inc. on Monday fell below $500 for the first time since August, days after a lackluster fourth-quarter earnings report and a $42 billion buyout offer from Microsoft Corp. for Google's largest rival, Yahoo Inc. In afternoon trading, Google shares fell $21.30, or 4.1 percent, to $494.60. They have ranged from $437 to $747.24 over the past year.

Shares of Mountain View, Calif.-based Google have fallen 12 percent since Microsoft's $42 billion bid for Yahoo was announced Friday. Google reported its quarterly earnings after the market closed Thursday.

Stephen Houck, a former antitrust enforcer in New York state, predicted that Google could have a hard time raising antitrust concerns over the deal.

Additionally, on Sunday Goldman Sachs analyst James Covello removed Google from the "Goldman Sachs Technology Favorite Growth" list, citing a recent sell-off in the shares. He noted the stock has fallen 14.1 percent since it was added to the list on Jan. 18, exceeding a stop-loss threshold.

In a note to clients, Covello attributed the sell-off to concerns about Google's exposure to an economic downturn, particularly in light of the company's fourth-quarter results, which missed Covello's estimates and the Wall Street consensus.

However, the analyst maintained a "Buy" rating, and called the stock's valuation compelling.