The One Stock Not to Short
The idea of shorting shares of Google Inc. (NASDAQ:GOOG) is a daring bet that sounds insightful, but doesn't add up. Apple (AAPL) is pulling Google Maps from its iPhones and iPads and that has led to chatter on the internets about the downfall of Google. Despite what the blogs and message boards may be saying about Google's decline, Mastery takes the high ground.
Apple is releasing a Map App, good for them but its small potatoes. Could this be the opportune time to short Google shares?
You'd have to have a set of Brass Balls to short Google today. If you're lucky, maybe GOOG drops to $500, giving you a gain of about 10%. Or if you're unlucky, shares return to $600, and you're stuck with a -10% loss.
Earth to web surfers: Google is not going to fall off the face of the planet because Apple is replacing Google Maps on the iPhone. In fact, Google realizes minimul revenue from Google Maps, and the app will most likely still be available in the iStore. Piper Jaffray's Gene Munster wrote in a research note Wednesday that Apple's decision to abandon Google Maps shouldn't have any "material impact" on the revenue Google gets from iOS.
Lets face it, humans are creatures of habit and we don't like change. My guess is most users are comfortable and familar with Google Maps. Many of us lack the time and ambition to learn a new interface even if it is created from Apple.
Yes, "Apple is at war" makes for some sensational headlines. But don't miss the big picture of what Google has going for it:
- Dominate player in Web search, which is not going away and will not be replaced by apps as some speculate.
- Will begin manufacturing their own phones thanks to the Motorala acquisition.
- Recent price target reductions on Google shares are well above $600.
Last week JPMorgan Chase reduced its price target to $670 for Google. Deutsche Bank did the same and cut their target price on GOOG to $662. Whoop-te-doo, that means in the next year Google might only increase 17 to 18%.
|Ticker||Current Price||Target Price||% Increase|
|GOOG||$ 563.75||$ 670.00||18.8%|
|GOOG||$ 563.75||$ 662.00||17.4%|
MASTERY Bottom line:
Don't lose your house betting against Google.
Even with the latest target price reductions there is money to be made going long GOOG.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Oil’s Biggest Threat: Demand to Peak Within 15 Years | Financial Sense
- "Something More Might Be In The Air" - What Has Gotten The "Smart Money" So Spooked? | ZeroHedge
- Mexico Orders Banks To "Stress Test" For A Trump Victory | ZeroHedge
- Housing Starts Crash Most In 5 Years To 18-Month Lows | ZeroHedge
- Hillary Campaign Apologizes After Her Bus Is Caught Dumping Human Waste On Side Of Street | ZeroHedge
- Wikileaks Releases Another 1,803 Podesta Emails In Part 12 Of Data Dump; Total Is Now 18,953 | ZeroHedge
- Hillary Clinton Linked To Mysterious Front Associated with Julian Assange Pedophile Smear | ZeroHedge
The most relevant financial news and articles from the Internets
- CHATBOTS EXPLAINED: Why... | Business Insider
- US General thinks Iran is behind the missile attacks on US Navy... | Business Insider
- Trump's 'bad hombres' and 'nasty woman'... | Business Insider
- The brutal 'honest trailer' for 'Ghostbusters' picks apart all the... | Business Insider
- Supreme leader of Iran weighs in on US election ahead of final debate | Business Insider
- 'I didn't even apologize to my wife... | Business Insider
- Elite schools like Harvard and Stanford are way... | Business Insider