Google Shares Close Below $300

But Street Holds Steady on Stock; GM, Ford Rise on Bailout News

By Published on .

LOS ANGELES (AdAge.com) -- Google today skidded below $300 a share for the first time since October 2005, the latest sign of how mounting recession worries are dragging down stocks of companies great and small.

The leading internet media company's shares closed at $291. The 6.6% drop came as the Dow Jones Industrial Average fell for the third consecutive day.

The DJIA closed at 8,283, down 411 points or 4.7%. It's now 13.9% below its Election Day close, though still above early October's bear-market bottom (7,883).

'Buy' and 'hold'
Google tumbled as analysts weighed just how the ad-spending downturn will affect the search market's standout player. Citi Analyst Mark Mahaney today lowered estimates on Google and gave its stock a price target of $450. He noted that fourth-quarter online advertising is slowing materially, with growth rates at the largest e-commerce companies declining. "At some level, Google will be impacted," he wrote in a note.

That doesn't mean the Street's giving up on Google. Among 39 analysts who follow the company, 37 --including Mr. Mahaney -- have "buy" recommendations and two have "holds," according to the Bloomberg database. Google now has a market cap of $91.6 billion-and another $14.4 billion in cash.

Google has been getting more aggressive in its monetization and in the third quarter carefully managed costs to maintain margins.

Yahoo down 9%
Rival Yahoo today fell 8.9%% to $10.34, hitting its lowest level since 2003. Its market cap -- $14.3 billion -- is less than one-third the takeover bid ($44.6 billion) from Microsoft Corp. that Yahoo rejected earlier this year.

The Standard & Poor's 500 fell 5.2%, getting perilously close to its bear-market low. The Ad Age/Bloomberg AdMarket 50 fell 4.4%. Click here to see current AdMarket prices.

Retail stocks slumped on increasing worries of a disastrous Christmas season. Best Buy fell 8% after slashing its holiday forecast. In a memo to employees (as reported on Consumerist.com), Best Buy said: "From where we stand today, we could see total company comparable store sales for the rest of the fiscal year decline by 5% to 15%."

Automakers rally
Just two of the AdMarket's 50 marketer, media and agency stocks today rose: General Motors Corp., which jumped 5.5% today after hitting its lowest point in 65 years on Nov. 11, and its ailing Big Three sibling, Ford Motor Co., up 2.2%. The two stocks advanced amid signs that Democrats in Washington are pressing ahead on a bailout plan for Detroit.

Eighteen of the AdMarket 50 stocks hit 52-week lows -- and in some cases multidecade lows. Interpublic Group of Cos. plunged 14.3% to $3.88, reaching its lowest price since 1988. Interpublic's market cap now is just $1.85 billion.

The AdMarket's worst performers: troubled telecom Sprint Nextel, down 22.9%; CBS Corp., down 19.3%; and Interpublic.
In this article:
Most Popular