GOOG still FASCINATING: 90-day update on equivalency test

Posted Sep 25th 2006 2:56PM by Sheldon LiberSheldon Liber RSS Feed
Filed under: Blogs, Rants and Raves, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), eBay (EBAY), Time Warner (TWX), Starbucks (SBUX)

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Yes, Google Inc. (NASDAQ:GOOG) is still one of the most fascinating companies in the world, commanding a high price and superstar investor status.

Google remains in the news with multiple stories broadcast on the web each day, and everywhere else: bonding with Apple (AAPL) and Time Warner (TWX), challenging Microsoft (MSFT), Yahoo (YHOO), and eBay (EBAY), scaring newspapers and publishers, adding features to their line of products and services, getting tangled up in litigation here (Click Fraud) and abroad (Google relents and posts Belgian court ruling on its website), analysts speculation about GOOG's future share value and all this is just a partial accounting.

90 days ago I posted 10 Reasons I think Google is going down: and the following was reason number 10. This recap and update tracks current values holding myself accountable for my comments.

10. Does not pass the equivalence test.

Google closed today with a capitalization of approximately $122 billion. To give you some perspective, that is the equivalent of Anheuser Busch (BUD) $35B + Federal Express (FDX) $34.5B + Starbucks (SBUX) $28B + Harley Davidson (HDI) $14.5B + Black & Decker (BKD) $6.5B and Intuitive Surgical (ISRG) $3.5B combined. In my opinion, if someone offered you all six of these companies for all your shares in Google and you told them to take a hike than you are nuts.

So how is it doing now?

Based on the final closing prices on Friday September 22, 2006 here is where it stands.

  • Capitalization of GOOG $122.9B
  • Capitalization of the combined six companies: BUD $36.2B + FDX $32.5B + SBUX $25.7B + HOG $16.0B + BDK $5.7B + ISRG $3.8B = $119.9B

Google is ahead by $2.1B or 1.7% over the last ninety days. As I complete this story GOOG is down slightly against the group, bringing them closer together, and It has been more volatile over the period. This is not unexpected, but overall the equivalency test has not indicated any material difference. That said, Google has held its own and showed more stability than I would have expected.

  • Note: Harley Davidison changed its symbol from HDI to HOG.

Other recent articles:
Microsoft needs a NEW IDENTITY: Part 2 of Micro'soft' vs Micro'hard'
Micro'soft' vs Micro'hard' -- Break it up fellas!
If GOOG sinks GOOG stinks!
The 'WOW Principal' of Investing: Find winners like MRK, Petro-China

Disclosure: I own shares of FDX, SBUX, HOG, ISRG and TWX. I hold no position in the other stocks mentioned.

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.

Tags: Anheuser Busch (BUD), AnheuserBusch(bud), Apple (AAPL), Apple(aapl), Black and Decker (BDK), BlackAndDecker(bdk), equivalency test, EquivalencyTest, Federal Express (FDX), FederalExpress(fdx), Google (GOOG), Google(goog), Harley Davidson (HOG), HarleyDavidson(hog), Intuitive Surgical (ISRG), IntuitiveSurgical(isrg), Sheldon Liber, SheldonLiber, Starbucks (SBUX), Starbucks(sbux), Time Warner (TWX), TimeWarner(twx), Yahoo (YHOO), Yahoo(yhoo)

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