Tuesday, March 07, 2006

What goes up........


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George Reyes, the 50-year-old in charge of Google’s accounts, might not have run the finance department of a public company before, but surely he would have been aware that loose talk can cost stock-market investors billions.

So it proved last week. On Tuesday, just a few words on how Mr Reyes expects Google’s stellar revenue growth rates to fall were enough to knock $8 billion (£4.5bn) off the company's market value as the shares plunged just minutes after his speech.

"At the end of the day, growth will slow," he said in a presentation to analysts, bankers and journalists that was also broadcast on the internet. "Will it be precipitous? I doubt it."

The remarks – identified as "remarkably frank" on Wall Street and made only two days before Google is to host its annual analyst conference in Silicon Valley – sparked a frenzy.

In morning trade in New York on Wednesday, shares in Google rose just $1.10 to $363.72, regaining some poise – but just a fraction of the $27.76 they lost in the previous session.

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