Google Shakes Off Lockup Talk

Signaling some of the market's worries about Google, UBS initiated coverage of the stock last Friday with a reduce rating and a $160 price target.

But, arguing that the Nov. 18 expiration's impact on the stock is overrated, Credit Suisse First Boston analyst Heath Terry raised his price target on Google from $177 to $225. Terry has an outperform rating on Google; his firm was one of the company's lead underwriters.

"While we expect that the uncertainty the impact these expirations will have will create plenty of volatility in shares of GOOG, we believe the ultimate impact on the stock price once it is all said and done will be significantly less than our gauge of investors' expectations," writes Terry in his Wednesday note.

"These lockup periods are only one of the limitations on insider stock sales," says Terry. "Quarter-end black out periods, management's structured selling plans, and the company's employee option vesting schedule will all limit the amount of stock sold. ... We don't expect significant sales by the executive officers and directors, who control 67.6% of shares outstanding, given the dual class structure and the lengths management went to in order to maintain control."

Going into next week, Google has a float amounting to no more than 27.2 million shares, according to TheStreet.com's calculations -- stock worth $4.6 billion at Wednesday's prices.

For purposes of comparison, Yahoo! (YHOO Quote) -- the Google competitor and fellow dominator of the Internet advertising market -- has a float of 1.1 billion shares worth more than $40 billion.

Further cutting down the supply of Google stock are the disclosures, at various times, that Fidelity, Legg Mason, Vanguard Group and Fred Alger Management have owned a total of 11.8 million Google shares, leaving only 15 million or so shares -- roughly $2.5 billion of stock -- for everyone else.