This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Google's Gallant Fan

"We are now less concerned with the competitive threat posed by MSN over the near-to-intermediate term (beyond noise, of course)," writes Gallant, "and more bullish about the domestic search market's growth outlook in '05 and '06 even without a significant ramp in local search spending."

The threat that the latest lockup will pressure Google's shares, says Gallant, is offset by the the pullback of Google's shares from their early February peaks.

"Our analysis and client relationships suggest there will be enough institutional investor demand to soak up any supply that comes to market," writes Gallant.

In assessing the risk that the latest lockup expiration will flood the market and drive down Google's share price, Gallant calculates that nearly half of the 177 million shares affected by the expiration are held by executives who have committed at least a portio of their holdings to scheduled selling plans. "Thus," he says, "we do not anticipate any incremental selling on their behalf."

As for the 90 million remaining shares covered by the lockup, Gallant says a worst-case scenario would have Google employees selling 31.5 million of those shares, or about $6 billion worth of stock at current prices.

While that's a lot of stock, Gallant says he believes there's institutional investor demand for it. If professionals buy up all the stock coming on the market in the worst-case scenario, he calculates, that would mean institutional holdings of $14 billion in stock, or 26% of Google's market capitalization.

By comparison, says Gallant, Yahoo! (YHOO - Get Report) has $40 billion institutional ownership, amounting to 82% of its market cap; eBay (EBAY - Get Report) has $50 billion of shares, or 92% of its market cap, institutionally held, and (AMZN) has $13 billion of such ownership, or 86% of its market cap.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
EBAY $23.78 -0.81%
GOOG $696.83 0.65%
MSFT $49.87 0.18%
YHOO $36.01 0.00%
AAPL $94.36 -0.86%


Chart of I:DJI
DOW 17,645.92 -104.99 -0.59%
S&P 500 2,051.14 -12.23 -0.59%
NASDAQ 4,727.6040 -35.62 -0.75%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs