This post from Jim Cramer's blog originally appeared Feb. 14 at 5:53 a.m. ET on RealMoney.
These two companies disappointed and disappointed badly to me. They didn't deliver what we thought they would, but more importantly they didn't deliver the guidance we expected.
Now what's happening to them? They are creeping right back up, headed back to where they were before the huge misses.I struggle over these moves because, if anything, things have gotten worse for them. Google's about to close the Motorola Mobility (MMI) deal, the one where they paid $12.5 billion mostly for technology, including a ton of patents that will help Android gain share. At least that's what they've said. The problem is that right now Apple (AAPL) is pulling away and I don't think this deal will let Android catch up. Nor do I like the Google TV story. That's not a compelling needle mover. I want to see ads get higher rates online and I want to see how mobile is going to be monetized. That would help a long way toward doing something with the Android model that makes up for the profitless way that Google does business vs. the profitable way that Apple does it. Amazon? I don't know. You have to believe that it was wildly underpromising on that last quarter and I don't think that's Amazon's style. I think Amazon, like Google, is trying to take on Apple, this time on the hardware side with the Kindle Fire and I think that it's just going to cost a lot more money and a lot of gross margin to do so, especially if the reports about a new smaller-form-factor iPad from Apple with 4G that might be perfect for reading and downloading are coming true. I see no reason why Amazon should go higher. So what's going on here? Why do stocks go up when they shouldn't? Here's some ideas I am pondering: Maybe they shouldn't have dropped as much as they did in the first place. They are still excellent companies with excellent growth prospects. They aren't Nokia (NOK). They aren't Research In Motion (RIMM).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV