Google Is Up To Something

Google announced a $3 billion commercial paper program and a line of credit, even though they have $30 billion in cash and no debt. The only logical explanation is that they plan to spend some of their cash. They can either:
  • Repurchase shares.
  • Pay a dividend 
  • Make a large acquisition
All of these would be a positive for the stock market, especially if they use a large chunk of their cash. My best guess is that they repurchase shares.  I will consider purchasing the shares on further weakness, as a large buyback announcement should give the stock an initial jolt and put a floor under the stock while it is going on.

7 comments:

Anonymous said...

I'd bet they are making a purchase and the initial announcement may push shares lower. Especially if the street feels they overpaid.

Anonymous said...

GS earnings are going to be the catalyst to move this market in either direction. I think they will have to be out of this world to move the market higher.
I see them being inline to slightly better...not enough.

Whats your take?

Tsachy Mishal said...

A cash buyout does not usually have a negative effect on the acquirer. The problem is when the acquirer issues shares to buy a company.

A buyout would be better for the market in the short term because the market would get the bang immediately. A repurchase would happen slowly over time.

Tsachy Mishal said...

JPM had good trading results while BAC/Merrill had negative trading results. GS is best in breed so if JPM achieved good results I think GS should be able to.

I believe that in most cases the way the market moves shapes how people view the news rather than the other way around.

Anonymous said...

If you want to know where the market is headed....

http://www.schaeffersresearch.com/commentary/content/monday+morning+outlook+consumers+are+fearful+and+djia+backpedals/observations.aspx?click=home&ID=101132

Random Thoughts said...

http://www.techeye.net/business/google-buys-chunk-of-annoying-game-outfit

maybe they looking for more


"The investment is “highly strategic”. In otherwords Zynga will be required to put out for the search engine.

Techcrunch thinks that the gaming outfit will be the cornerstone of a new Google Games to launch later this year.

Zynga’s games give Google Games a solid base of social games to build on and will see it push further into the social notworking scene."

nicasurfer said...

google is fucking up bigtime