S&P Downgrades Google stock from 'Buy' to 'Sell'

[aohus]

Forbes

After further consideration of GOOG’s plans announced yesterday to purchase Motorola Mobility (MMI 38, Hold), we see greater risk to the company and stock. We expect the transaction to be consummated next year, but later than early ’12, which GOOG indicated. Moreover, despite MMI’s extensive and valuable patent portfolio, we are not sure it will protect Android from IP issues. We also believe the purchase of MMI would negatively impact GOOG’s growth, margins and balance sheet. Based on revised DCF analysis, we are cutting our 12-month target price to $500 from $700.

Overall, Google stock is down 4.8% since the Googorola announcement

 

[patrick0brien]

First thought upon the announcement of the acquisition: "Well, there are reasons Moto spat them out last year..."

Second thought upon the announcement of the acquisition: "Oh, boy this is going to be fun to watch..."

 

[imahawki]

I've been getting into lots of debates with the office Phandroids... my general perception is that this was a knee-jerk reaction. Emotional, "vengeful" reactions are things I expect to see on internet forums, not corporate board rooms (at least not for well run companies, which may be what S&P is thinking).

 

[gkarris]

Who knows, it may be like the Northern Telecom deal where Google just wants the patents and to keep the system open, just not make handsets?

Motorola was spinning everything off for a reason...

 

[Melrose]

Googorola. I like that.

 

[Tiggs]

Even with the drop today, GOOG still overpriced compared to AAPL using any value metric. So tempting to short GOOG...

 

[nylonsteel]

re to op
so whats yer point?