Why are Internet stocks slowing?
Posted
Jul 18 2008, 11:36 AM
by
Todd Harrison
I spent the weekend with some of the smartest techies on the planet, guys and gals from all over the world: They drank the Kool-Aid a long time ago. By the time I got back to New York I was ready to get with it and stop living in the Stone Age (I still don’t even have a Facebook page). But if the Internet has so much growth potential and will eventually displace everything including television, then why are the stocks associated with the information highway system limping along at a snail’s pace or have curled up like armadillos? Internet stocks haven’t been world beaters for a long time and right now the Internet Holders is at a 52-week double bottom and vulnerable to the four year low of 44.
After the bell Google posted earnings that missed the consensus estimate. I think the company’s goal of being aloof or standoffish with respect to Wall Street is really backfiring. The company has now missed the consensus estimate in three of the last five quarters. Posting $4.63 the company missed by a dime as research spending surged 65%. For some time the company has been chided for hiring too many people that essentially fiddle all day long.
This might be a great inducement to get eggheads to sign on the dotted line but when there are shareholders looking for results (a little different than great ideas in skull sessions) it might be smart to restrict indoor skateboarding and maybe lay down goals to actually produce stuff. Perhaps nothing did more to send the shares swooning in the after-market than comments from the CEO that this is a “challenging economic environment.”
But the Internet is blowing up... What gives and why do all the stocks in the space look so horrendous? According to Cisco, the growth of IP traffic will be nothing short of out-of-this-world.
Top Stocks blogging partner Todd Harrison is founder & CEO of Minyanville.com. This post was written by Minyanville Professor Charles Payne, see the full article here. See also:
Freaky Friday Potpourri: Anatomy of a Short-Squeeze
IBM: Downturn? What Downturn?
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