Google’s Shares Top $300; It Is Now Worth $84.5 Billion
SAN FRANCISCO — Google started as a noun. Then it became a verb. Pretty soon, googol may be the company’s stock market value.
Google Inc.’s shares rose $6.85 to $304.10 on Monday, the first time the 7-year-old Internet search leader’s stock closed above $300. At that price, Mountain View, Calif.-based Google is worth $84.5 billion -- more than such venerable companies as Time Warner Inc., Amgen Inc. and Hewlett-Packard Co.
It’s a sharp turnaround from August, when tepid demand forced Google to cut the value of its initial public offering in half. Since then, its shares have risen 258%, from an IPO price of $85, as investors vie to own one of the world’s fastest-growing firms.
There has been little major news to propel Google’s stock since late April, when the company said first-quarter profit soared 500% from a year earlier. Yet the shares have risen nearly 40% since then, hovering just below $300 for three weeks before finally topping that milestone.
Perhaps investors were excited by updates to the Google Video service, which on Monday began letting users seek and watch short video clips.
The company created the world’s most popular search engine and took its name from the number googol, which is 1 followed by 100 zeros.
It makes nearly all of its money from online advertising. To some, that makes Google a media company -- if so, it’s the most valuable, worth more than News Corp. or Walt Disney Co.
Scott Kessler, an Internet equity analyst with Standard & Poor’s, said he didn’t think the stock was overvalued, at about 60 times this year’s estimated earnings per share. But he wondered how investors would react when Google reports second-quarter results next month.
“The expectations are unchecked,†he said. “That could ultimately prove an element of the stock’s undoing come July.â€
