Constant's pations

If it's more than 30 minutes old, it's not news. It's a blog.

Wednesday, October 12, 2005

Google appears to be chasing TW into the AOL cash furnace

Matt linked to more tales of the expanding Google-dom.

In my personal opinion, Google's financials aren't supporting the acquisition.

They're already financing the current operations with stock issuance. The market is already signaling a peak price. The only way to finance these debts appears to be with continued stock issuance in a downdraft.

Is Google following Time Warner into the AOL pit? Unless their cash flows turnaround, which appears unlikely given the freebies apparently being offered, it would appear Google has reached a momentary peak.

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There's something that seems a little odd with Google, a search engine company, first branching off into VOIP [free?], then NASA support [is there a future?], and now ISPs [didn't AOL-TW deal tank?] and free WiFi for San Francisco [more free?].

I get the impression that they've got great ideas, but aren't really thinking about long-term cash.

Is Google chasing market share, but ignoring the market cash? It appears they are getting distracted.

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June 05 was the peak volume; so I'm not clear what's keeping this stock price where it's at--volume is falling away, despite the announcements.

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SEC has TW and GOOG documents. Hmmm. . .

-3,577,144 doesn't look right in FY04, as well as the summation 977,044.

There may be either a typo, or something else that's wrong. But that -3M figure, if correct, is not good.

Capital stock is what is keeping it net cash rising; but that's diluting the shares.

The key is if you look at 3Q04, you'll see a spike, then a another one in 1Q05. 4Q04 has an issue with Depreciation.

If you look at 4Q04, you'll see the dance with the receivables and current assets: It looks as though they've issued things, but were waiting money.

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It's not clear to me that they're effectively managing their cash. You can't keep issuing stock, while at the same time giving away prizes. I'm not surprised the stock price is off its peak.

The speed at which they're making these announcements, at the same time that the stock is off peak price suggests their plans are far too aggressive relative to the technical risks.

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We look forward to hearing more management discussion and dialog about their future plans, given the apparent weaknesses in the cash positions; and how they plan to finance the potential acquisitions given the apparent weakening stock price.

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The comments above are merely an personal opinion, they are not a statement of fact, nor may they be widely held or accepted.

Per the Private Securities Litigation Reform Act and Rule 10b-5, the above comments may contain forward looking statements. These statements are merely an opinion and should not be taken as definite or certain.

There are many factors that could affect the future results including management decisions. Management may, despite the above comments, make adjustments to significantly improve their position.

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