Google to be Added to S&P 500 Index 148
hrbrmstr writes "According to marketwatch.com, Google is being added to the S&P 500, replacing Burlington Resources Inc. While this has provided a short-term boost to the stock price, time will tell what the overall impact will be on this respected index and the institutions (i.e. mutual funds) that follow it."
More info (Score:4, Informative)
Re:Good News (Score:4, Informative)
S&P? (Score:1, Informative)
Re:It's 1999 all over again (Score:5, Informative)
Their gross profit last quarter was $372,208,000 http://finance.yahoo.com/q/is?s=GOOG [yahoo.com] .
In 1999 almost all of the internet companies had yet to have their first profitable quarter.
Re:Big Deal (Score:2, Informative)
To be fair, you probably weren't in the article submitters or the editors minds when they decided to run this story here. Some of us buy/sell shares. Being added to an index is generally good for a company because it will automaticallly be added to any index-tracker that uses that index.
> Their stock price is inflated beyond belief and worth only as much as someone
> will pay me.
Every product, service and share price is only worth what others will pay for it.
Re:It's 1999 all over again (Score:2, Informative)
Ah, wait, now I understand. Burlington Resources isn't really delisted, it was subsumed into Conoco-Phillips when they were bought out for $35.6 billion USD.
Now it makes more sense: Google is filling an empty slot in the S&P500, though the rationale for replacing a resource company with a computer-based service company is somewhat debatable.
Re:So Who Got Bumped? (Score:4, Informative)
Let god forbid GOOG in DJIA. (Score:3, Informative)
Re:Good News (Score:2, Informative)
One of these is that the company has to be in existence for at least 25 years
http://otherthingsnow.blogspot.com/ [blogspot.com]
Article head (Score:2, Informative)
Re:Dividends (Score:2, Informative)
Ah-HA! So you're the guy my old finance professor used to make fun of. When a stock splits, you don't get anything for free. The company is still worth whatever it's worth, it's just that now the stocks on a per share basis are worth half as much because you have twice as many shares. When I examine companies, I don't even bother with per share statistics, I look at the aggregate numbers only.
On the topic of dividends, whenever a company pays dividends, that equates to less money that can be invested back into growing the company. Unless you take your dividend checks and invest it in more stock of the same or similar companies, your total rate of return will be lower.
well, yeah, but you couldn't tell... (Score:3, Informative)
Many of these companies were showing positive EBITDA (operational profit before certain costs) at that time, because the market was just starting to demand it. Of course, it was all lies.
Google's profit is probably not lies. And even though they are completely inept with accounting and money (see their pre-IPO share registration scandal, their misstructuring of their employee stock option plans, etc.) it's also likely their profit isn't due to accounting errors either.
But it's also profit in a market with an extremely low barrier to entry, and so will require a lot of maintenance to keep that money coming to them and not their competitors.