Mylene Mangalindan of the The Wall Street Journal
writes, “Can a $300 stock be a “buy”?
The shares of Internet-search leader Google Inc. topped that level yesterday, less than a year after its initial public offering at $85 a share.
Despite the lofty price, 24 of 30 stock analysts on Wall Street rate the company as a “buy,” or “strong buy.” Mark Mahaney, of Smith Barney, has posted a price target of $360 a share, recalling some of the outlandish price targets at the height of the Internet-stock bubble in 1999.
At its 4 p.m. price on the Nasdaq Stock Market of $304.10, up $6.85, or 2.3%, Google commands a market capitalization of $84.5 billion, ranking it 23rd among U.S. corporations, just ahead of Home Depot Inc. and just behind PepsiCo Inc.
The rich valuation is rooted in the growth of online ads, which accounted for 99% of Google’s revenue last year.”
Story from Bloomberg News or theWSJ (you gotta sign up).
Split
Many stocks split when there price gets to high. For example you have ten shares and the value is $200 per share. The company splits the stock which gives you twenty shares but the value of the share lowers to $100. I read an article that Google is not planning on doing any splits. They are just going to let the share price rise. Splitting or not splitting does not effect the underlting value of the company.
If you would like to buy some Google but do not have the $300 to lay down for a share you can use the site http://www.sharebuilder.com. This site lets you buy stocks in dollar increments. You can buy $50 of Google and they will buy the partial share equivalent to $50. Using this method I own some Google, Amazon, and eBay.
WSJ—not just another soulsucking signup
For WSJ articles you don’t just have to give them a bunch of information, like NYTimes.com or WashingtonPost.com (for which, see BugMeNot), you actually have to give them a bunch of *money*—$80 a year ($40 if you already get the paper edition).