Google Shakes Off Lockup Talk

Get ready for Google (GOOG - Cramer's Take - Stockpickr) to pull another rabbit out of its hat.

A boatload of new Google shares is due to come on the market next week. The prospect of so-called lockup expirations has sparked chatter that the stock -- which has more than doubled in less than three months -- has topped out.

But some observers shrug off the lockup talk, pointing out that Google investors have heard this all before. These people say demand for Google shares will l likely neutralize any lockup-related selling -- at least for now.

"You only have four or five people who own the stock," says Frank Husic, managing partner of Google shareholder Husic Capital Management, in a reference to a handful of institutions with 500,000-share-plus holdings in the search-engine company. "How many more people are going to own it?"

Next Thursday, a post-IPO lockup on 39.1 million shares of insider-owned Google stock is slated to expire. The event could more than double the number of Google shares that are freely tradeable in the public markets. Skeptics have pointed to coming lockup expirations as obvious weights on the stock price.

But the likely desire of other institutions to get a piece of Google, Husic suggests, will offset any new supply created by the expiration. "People realize there could potentially be demand for the stock when the lockup comes off," he says. "It's these two forces playing against each other."

Concern about the expiration, along with worries that the stock's price has gotten out of control, already appear to have had an impact on the stock price.

From an offering price of $85 per share, Google zoomed as high as $201.60 last week. By Tuesday evening, however, the stock had retreated 16% from that level to $168.70; on Wednesday, shares were up $1.25 to $169.95.