It was a terrific ride for a while: Every three months, Google would post earnings after weeks of anticipation -- and amid wild guessing by analysts who received zero guidance from the company.
Of course, Google's plan was to extinguish speculation, but all it did was pour gas on a quarterly bonfire.
Withholding guidance leads to sure-fire volatility, which speculative investors love, because it can make for big gains when the numbers are finally delivered. It also imported to Wall Street the kind of fascinating theater usually found on Broadway.Adding to the fun was what seemed to be a cunning campaign to enshroud Google's financials in original and ever-changing accounting. Google's stock would often move erratically in the wake of its earnings as if investors were never sure what the heck was going on. Last October, when the company announced somewhat confusing third-quarter results, the stock rose a bit,
Until last summer, more than 8 million shares a day were traded on average. Since then, volume has held below 8 million. In January 2006, when Google's stock was trading around $450 -- not far below where it now sits -- average volume hit 16.1 million shares a day. This January, it fell to 6.8 million shares a day. The chart looks a lot the same, if you look at the trading ranges that comprise Google's volatility:
In October 2004, the month that the stock caught fire, Google traded between $129 and $200 -- a $71 range. That was equal to 55% of Google's price at the end of September trading.