On Tuesday, Internet search giant Google’s share prices dropped more than seven percent, following a meeting in which the company’s Chief Financial Officer, George Reyes, informed investors that he foresaw relatively few advances to a technology that provided it with increased advertising revenue, The New York Times reports.
Following Reyes’ comments at a Merrill Lynch-sanctioned conference in New York, the shares dropped almost $52, or 13 percent, before rebounding slightly for a close price of $362.62, $27.76 lower than yesterday’s starting price, according to The Times.
Reyes told the Merrill Lynch conference that the rapid pace at which Google’s stock had been increasing was going to slow considerably due to the lack of financial benefits related to a technology that selects advertisements displayed on search results pages, The Times reports.
Later in the day, the company issued a statement with the intent of squashing some anxiety on the part of its investors to little avail; the stock price increased by a meager $1.37 in after hours trading, according to The Times.
Jordan Rohan, an analyst with RBC Capital Markets, an international corporate and investment bank, told The Times that Google investors are particularly emotional.
“Some of it has to do with the notion that companies like this could exist in 1999, but are impossible today,” Rohan told The Times. “When Google investors hear the CFO make any comment that could be contorted to be pessimistic, they overreact.”
Google offered its stock to the public for the first time in August 2004, at a price of $85 per share, The Times reports, and in the following years, that price skyrocketed, reaching a closing high of $471.63 in early 2006.
For related coverage, read Google, EarthLink Bid for SF Wi-Fi and Google Faces Injunction Over Image Search.
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