Should you be all Ga-Ga for Google? - Dylan Jovine

Writing About the Stock Market & Life Since 2003


Should you be all Ga-Ga for Google?

QUESTION OF THE WEEK: Should you be all Ga-Ga for Google?

IF MY MEMORY SERVES ME CORRECTLY, I’ve answered the Google
question recently in this very same column.

But it seems that a recently published “BUY” report, issued by
the illustrious firm of Goldman Sachs, has many of you bent out of

That’s right.

I’ve recieved over 20 questions this week asking whether I think Google,
in light of this “new information,” is now a “buy.”

So I’ve decided to answer the question again and for the last time.

Why not?

I just finished stuffing my Thanksgiving-day face.

And I’ve just snuk into the private office in my folk’s house.

So before I slip into a turkey-induced meat coma, I’ll say what I
have to say.

But One Caveat Before I Go Forward: Normally, I give the person who
asks the question credit for the question.

I can’t do that this time. There are too many of you.

So, while you won’t see your name illuminating the pages of this column,
at least you’ll know where I stand once and for all.

Here we go:

Whenever Goldman Sachs writes a big report touting a company it pays
to read it.

Especially if you’re in need of toilette paper.

Yes, you heard me correctly – Toilette Paper.

While Goldman Sachs is very adept at making money for it’s

Check this out:

It will show you that Goldman was one of the underwriters that took
Google public.

An investment banking relationship doesn’t end when a firm like
Goldman Sachs takes you public.

It just begins.

For example, Google currently has 40 million shares in the float.

Appx 225 Million more are now free trading. What that means is that
all of the insiders who own stock real cheap are going to be selling
it to the market.

Put yourself in Goldman Sach’s shoes. They want all the Google insiders
to sell the stock through their firm so that they can get commissions.

In addition, they want to prove to the insiders who are going to reap
millions that they can help them make many more millions if they
let Goldman Sachs handle the sale.

If Goldman does this well, they not only get commissions for managing the
sale, but they get the first phone call when Google needs an investment

Therefore, I would be VERY WARY about any reports issued by any of the
underwriters for the next 12 months.

I’m not saying there is anything crooked going on.

I’m just saying that if you don’t know who the patsy at the card table
is than you’re it!

In all seriousness, thanks to everyone who sent their questions.
It was well worth the heart burn.


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