Google's Rally in Perspective

From CNET:

Google's stock has amazed investors and the public, but the returns still lag those experienced by New River Pharmaceuticals, a 19-employee company that has designed an attention deficit disorder drug.

The two companies went public two weeks apart in 2004. New River went public at $8.00 and is now sells at above $33, giving it a 317% return, according to statistics on IPO Home. Google went out at $85 and sells for $286, a 236 percent return. Google also trails China's Shanda Interactive, which has seen its stock rise from $11 to $38, in terms of return.

It's an improvement for the search giant, however. In April, it also trailed WPT Enterprises, which organizes the world poker tournament, and Syneron Medical, an Israeli company specializing in laser hair removal technology.

Google

Google makes its first earnings announcement since its IPO Thursday night and the stock is getting whacked a bit in front of it. I am not sure what restrictions the company is under from the IPO, but it tonight may be a good opportunity to announce a secondary offering. You'll remember that the company cut its share issue back a bit because of a lack of demand. The stock has now traded above the original high end of the suggested range ($135), so I think they would get the show on the road and issue more shares. The management in its prospectus stated intentions to make the issue size large so that it would be liquid and the price would more likely represent the companies true value.

If they do announce a secondary, I would expect the stock to dip quickly on the news. I would view such a dip as a buying opportunity. Off the top of my head I would guess the dip would carry to around 120-125.

I have no position in google, no relationship to the company and this is just a hunch based on the statements made around their IPO.

Is Google eating their lunch??

Perhaps a short looming here. This is a volatile stock so a smaller position and wider stop may be necessary to participate.