POTC kicked off Q2 with another solid directional call on GOOG. Shares slipped sharply after hours and we anticipate further price erosion by Friday's close. Subscribers reaped a 200%+ profit overnight.
In the Trade Alert, we highlighted that GOOG's SG&A costs would hurt Q2 performance, and that is the buzz on Wall Street post report.
A well-respected technology analyst, Piper Jaffray's Gene Munster, appeared on CNBC's Fast Money post report and mentioned GOOG's fate could be going the way of MSFT: a company in transition as growth slows. The law of "big numbers" is a good way to explain the corporate dilemma GOOG is facing. Going from today's $157B ($494/share) market cap to $250B ($787.00/share) will not be easy.
We agree with Gene Munster in the short-run at least, and believe the next few quarters will be marred by more difficult Q/Q and Y/Y comparable earnings, as increased spending crimps bottom line/profits/earnings per share.
POTC estimates ramping legal costs associated with battles over privacy as related to search and collection and storage of user data, these will be awfully high hurdles GOOG could stumble on in the weeks and months ahead. And if the U.S. Department of Justice (DOJ) gets involved, a lot of GOOG's talent could exit for greener (less regulated) technology pastures. Because so far, GOOG has been very high up on the list the brainiest prefer.
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Form 10-K link for AAPL, filed on January 25, 2010:
AAPL's Conference Call link for Q3's financial results, 5:00pm ET, Tuesday, July 20: