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S&P downgrades Google stock in light of Motorola purchase

Posted: , by Michael H.

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S&P downgrades Google stock in light of Motorola purchase
Google's purchase of Motorola has been a fairly divisive decision in all areas of society: tech pundits are unsure if Google can successfully do hardware, lawyers are unsure if Motorola's patents really provide that much protection for Android, and now even the financial sector is down on the move. Standard & Poor's, the company made famous from its AAA ratings of market killing mortgage-backed securities, has downgraded its projections for Google stock.

S&P has downgraded the 12-month price target for Google stock from $700 to $500, and changed the rating from "buy" to "sell". S&P equity analyst Scott Kessler said regarding the move that the purchase of Motorola will lead to greater risk to Google and its stock. He also said that the company is not sure how well Motorola's patents will help in protecting Android, and that the purchase would "negatively impact [Google's] growth, margins and balance sheet." 

Of course, Motorola has been a successful company, and if Google follows through on promises to keep Motorola separate and run separately, these fears may be unfounded. Then again, even modest success from Motorola may lower overall growth of Google, which has been growing extremely fast. 

source: CNet

39 Comments
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posted on 16 Aug 2011, 20:04 2

1. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Oh oh time to backpedal fandroids. Let me guess...

Sniggly - their numbers are wrong *cooks up own positive numbers based on wild unsubstantiated assumptions*. Also makes derogatory comments about Apple "perjuring" themselves.

Remix - android has more market share than Apple

Superevo - jumbled words with lots of all cap words and exclamation points

Remaining fandroids circle jerk and bash Apple.

posted on 16 Aug 2011, 20:12 12

2. Sniggly (Posts: 7182; Member since: 05 Dec 2009)


Or I could just kill you now and save everyone a lot of time and brain cells.

posted on 16 Aug 2011, 20:22 5

3. Fanboys Suck (Posts: 609; Member since: 12 Dec 2008)


For as often as I disagree with you, I am 100% with you on this one. Please!

posted on 16 Aug 2011, 20:23

4. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Are you having a nerd sci fi relapse again? Or are you having delusions you're intelligent or tough?

posted on 16 Aug 2011, 20:30 8

5. Sniggly (Posts: 7182; Member since: 05 Dec 2009)


Just checking how seriously you take me. You didn't disappoint.

posted on 16 Aug 2011, 21:39

11. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Haaaaa! Says the guy who tried to get me banned from PA. Only one taking you serious is you.

posted on 16 Aug 2011, 21:45 5

14. Sniggly (Posts: 7182; Member since: 05 Dec 2009)


Who says I ever actually tried to get you banned? I only talked about it when you were at your most extreme assholishness.

You're the one who thinks I'm really threatening you.

posted on 17 Aug 2011, 00:06 1

22. Sniggly (Posts: 7182; Member since: 05 Dec 2009)


All right, here we go. Me killing you:

http://www.youtube.com/watch?v=XsCBToEUm_g

Enjoy your death!

posted on 17 Aug 2011, 11:41 1

32. taco5O (banned) (Posts: 5; Member since: 14 Aug 2011)


you know I only make fun of the ones I love the most.


I'm sorry I'm so mean all the time. I dont really have any iProducts. The closest thing I have is this fake origami ipod nano that I made. I did however paint it bright pink and wear it on a string around my neck. I have a little heart on it too. And on the backside, is sniggly's original profile pic, so its close to my heart!

posted on 17 Aug 2011, 11:42 1

33. taco5O (banned) (Posts: 5; Member since: 14 Aug 2011)


You dont want to know what I do with that full size poster of Remix's profile pic. Dirty dirty thoughts with that one.

posted on 17 Aug 2011, 11:50 1

34. protozeloz (Posts: 5381; Member since: 16 Sep 2010)


sorry man I don't approve the use of someones similar nick to mock them, did not approve it for Sigs....not gonna start now....

posted on 17 Aug 2011, 12:24

37. remixfa (Posts: 14163; Member since: 19 Dec 2008)


lol. what comes around goes around i guess.

posted on 16 Aug 2011, 22:25 5

17. TOdoubleD (Posts: 114; Member since: 28 Mar 2011)


Backpedal for what? Taco I am convinced that you are either 12 years old or have some kind of handicap. I don't say it to be mean but no adult in their right mind would blindly support a product the way you do Apple, and spend as much time as you do, defending them on this site. And the joy that you seem to get if something negative happens to another phone manufacturer is disturbing.

Honestly I feel bad for you, that this consumes so much of your life. There's a lot more to life than your iPhone buddy. I don't think Steve Jobs himself is as passionate about Apple as you are, and he makes money by doing it. I like my iPhone too, but I couldn't care less how much money Apple has or how many phones they sell. It has no effect on my life. Anyway, just thought I'd let you know there's a whole big world out there waiting for you.

posted on 16 Aug 2011, 22:57

21. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Read all the comments below to see fandroids in denial mode.

posted on 17 Aug 2011, 00:38 2

23. Whateverman (Posts: 3233; Member since: 17 May 2009)


I thought you didn't believe in commenting on articles that had noting to do with the OS you are in support of? Why are you comment on an OS that you obviously hate?

posted on 17 Aug 2011, 05:45 1

27. PeterIfromsweden (Posts: 1230; Member since: 03 Aug 2011)


Taco, if you used your brain here, you could actually come up with an good and valid argument here to make your point.
Instead of being uncivilized, you could have written something like this.
"It seems that Google will do a Apple and start making their own hardware, thus controlling both their software and hardware on Android phones. Meaning that LG, SE, HTC and Samsung will start switching to other OSes like bada, MeeGo and maybe WebOS."
You see, you can come with good arguments like this instead of your uncivilized arguments.

posted on 17 Aug 2011, 11:14 1

30. remixfa (Posts: 14163; Member since: 19 Dec 2008)


peter,
apple doesnt make anything, its all contracted out to foxconn, LG, and samsung.

Google is the only one of the big 3 (ms,google, apple) that actually owns any manufacturing equipment now. MS may be having an affair with nokia, but they arent married yet.

posted on 17 Aug 2011, 11:10 1

29. remixfa (Posts: 14163; Member since: 19 Dec 2008)


lets put your stupidity in perspective, taco.

Anything that grows company revenue increases stock price.
Anything that decreases company revenue, decreases stock price.

dropping 12 billion cash decreases revenue. Dropping it on a company that is in the red anyways severely decreases cash. Sooooo. what do u think is going to happen to the stocks?

I think this was only a suprize to taco.

posted on 16 Aug 2011, 20:48 4

6. bossmt_2 (Posts: 437; Member since: 13 Oct 2009)


S&P has not been batting 1.000, so if I'm Google I'm liking this. It's a risk but the reward is astronomical.

posted on 16 Aug 2011, 21:07 2

7. PTR91 (unregistered)


Time to buy more Google stock if it goes down, Apple stock not so much ever! For all you who make me laugh so much on all phonearena chat's thank you. Android rules!

posted on 16 Aug 2011, 21:12 1

8. Mike (unregistered)


The S&P has no credibility at all.

posted on 16 Aug 2011, 21:32 1

9. PTR91 (unregistered)


No, they do not. S&P (sex & poop). Please someone come up with a better one then that. It's Ipoop.

posted on 16 Aug 2011, 21:38 1

10. Bratag (unregistered)


This is the same organization that was giving the mortgage backed funds AAA ratings all the way up to the crash. In fact have emails on record, showing that they knew the crash was coming but "hopefully we will all be rich and gone by that time".

Forgive me if I don't take anything the S&P says seriously.

posted on 16 Aug 2011, 21:41

12. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Nice fandroids backpedaling and proving me right. No credibility at all. Unless they say Apple is doing bad and then it's totally credible.

posted on 16 Aug 2011, 22:26 1

18. bossmt_2 (Posts: 437; Member since: 13 Oct 2009)


Or if it was from someone other than the ratings company who thought mortgage-backed securities were a safe bet, maybe people would believe it.

posted on 16 Aug 2011, 21:44 1

13. Tmachaveli (Posts: 425; Member since: 01 Apr 2011)


Like i really believe them..this train cant be stop sorry my isheep thanks taco for putting your 2cents in.now go back in the bathroom and play with your mighty iphone....not

posted on 16 Aug 2011, 22:16 1

16. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Of course you don't believe it. You only believe reports that are GOOD for google and BAD for Apple.

posted on 17 Aug 2011, 02:11

24. i-impartial (unregistered)


I have no brand loyalty and simply base my puchasing decisions on hardware since the iphone came to Verizon. I have owned both and see their merits and shortcomings. However I think this was a shrewd move by Google which will benefit all consumers in the long run, Apple and others. It can be used as a bargaining chip in patent litigation disputes with Apple who is afraid of Android for good reason ... this aquisition will not benefit windows mobile yet protects Android and since Windows is more of a threat to the Android market than Apple's it takes away some of the reasons for Apple to want to cripple windows mobile. In short if Windows Mobile goes kaput due to Apple patent suits which Motorola (Android) have defenses against through patent leverage, their customers are more likely to swing in the direction of Android. Similar to a strong independent showing in an election tends to hurt the Democratic side more than Republican. This should overall help the consumer by continuing to push both Apple and Google/Motorola to maximize hardware and software to compete with each other. Get used to it folks this move ensures that it will be a two party system for a long time and neither one will be going anywhere any time soon. SO FORGET THE &*%$&#@ING brand names and anylize the best product it will not always be the same ... for instance what if the bionic comes out before the next iphone it will be the better of the two ... until the next iphone comes out,

posted on 16 Aug 2011, 22:12

15. lubbalots (unregistered)


Moto successful? Huh?

posted on 16 Aug 2011, 22:28

19. Guest (unregistered)


S & P?. this isn't the same company who was part of the CDO mess that started the housing market to crash is it?; anyone know?.

posted on 16 Aug 2011, 22:37

20. pong (unregistered)


Stupid credit rating company they are at it again, too quick to judge. no wonder they make too many mistakes

posted on 17 Aug 2011, 02:41 1

25. 530gemini (Posts: 2198; Member since: 09 Sep 2010)


Google doesn't have to buy Motorola just for their patents. I see this move as Google's action to battle head to head with Apple in capital share.

Google does not have a profit share from any of its android OEM's. With their acquisition of Motorola, they would.

It's all about how to make more money. Google saw how much Apple is making, and also saw how much android OEM's are making, and they simply want a piece of those cash. This is Google's next step per se. They have successfully introduced android to the market and have gained the lead in market share. Now it's harvest time.

This will be good for Google profitwise, but will not benefit other android OEM's. This would also be good for WinMo. Google's move in buying Motorola will make itself a competitor among other android OEM's. Although this move may not necessarily lose android adoption or Google's support towards current android OEM's, it's still nevertheless a concern among current android OEM's, that would definitely make them wary and consider fallback plans, such as welcoming WinMo into their product lines. They have to, just in case the competition turns unfavorable. WinMo will become the only major equal opportunity OS, which will make the adoption of WinMo faster and easier among the big guns in the mobile industry.

In summary. Google's acquisition of Motorola will give them monetary profit, but will negatively affect their market share.

posted on 17 Aug 2011, 03:17

26. PeterIfromsweden (Posts: 1230; Member since: 03 Aug 2011)


Agree with most of your post, but i think that WP7 is not the only equall platform. They've got a special deal with Nokia, and there has been rumors that Microsoft will start making their own phone as well.

I think that this is good for MeeGo, and WebOS if HP will license it. And of course this is very good for bada, as Samsung will start pushing their own OS now that Google will start making their own phones.

posted on 17 Aug 2011, 11:20

31. remixfa (Posts: 14163; Member since: 19 Dec 2008)


wow, way to paraphrase 4 other articles.

WP7 is not an equal opportunity platform. Nokia is the only manufacturer that is allowed to tinker with WP7 code.

google has already stated that their business practices WILL NOT change, their parterships WILL NOT be affected, and they WILL NOT leverage motorola against the others like samsung or HTC. Motorola will run as a seperate company just as it always has.

I think what it does do is push the other manufacturers just a little harder to one up eachother. Now there is always that "if we mess up google will change their mind and take direct control of motorola" in the back of their minds.

Does this mean that we will see higher quality (and hopefully some blur free unlocked) phones from motorola? Maybe.

Is the rest of what u said valid? According to google.. no.

posted on 17 Aug 2011, 11:55

35. protozeloz (Posts: 5381; Member since: 16 Sep 2010)


I think it could be a possible scenario, I rarely doubt it there are TONS of other reason Motorola would be worth every penny as Motorola has being doing some stuff goggle might be interested in other parts of moto.... for exaple this article here
http://androidandme.com/2011/08/news/motorola-ice-cream-sandwich-and-the-future-of-google-tv/

posted on 17 Aug 2011, 11:59 2

36. remixfa (Posts: 14163; Member since: 19 Dec 2008)


there are other reasons for the moto purchase for sure, but the biggest one and the only real one is the patent portfolio. 13 billion is a drop in the bucket compared to what would happen if apple's litigations won over. Moto is a huge patent shield for android more than anything. Not only does it protect google, it protects every android manufacturer out there.. which protects quite a few thousand jobs.

I would immagine (and this is pure speculation) that moto wouldnt just sell the patents to google or anyone. They probably said "take all of moto or none of moto". That was moto's last big play to keep them relevant and they played it well if my speculation is correct.

posted on 17 Aug 2011, 13:01

38. protozeloz (Posts: 5381; Member since: 16 Sep 2010)


people clam Google will be preferential towards Motorola because they compare Symbian and Nokia where the same, the truth is this is not the same as Symbian was the software company was bought by Nokia the manufacturer this is the opposite whet Google's main interest is keep android alive not Motorola (well not much at least) it would be dumb to give a complete unfair situation to other manufacturers that support the ecosystem, could Google give certain VIP benefits to Motorola? I say they will and it will make Motorola a much stronger competitor, but not enough to upset all the other manufacturers into leaving, I even believe that now that Google Can play around with other devices the only ones who might loose are the ones making the processors, because if Google chooses 2-3 architectures they will implement the best hardware acceleration will be most likely to see all the other manufacturers choosing the most similar approach to make their jobs easy, still Google can decide to use certain architecture for tablets and another for phones and some others for Google TV/android @home and make chip manufacturers happy too.... any competition this alliance might bring could be mostly bound to create a stronger skin to complete bringing a load of full features and faster update process..... so I don't see why this should be taken badly

posted on 17 Aug 2011, 09:26 2

28. Vlad (unregistered)


Sweeeet! Time to buy Google stock BIG time! As soon as it's at 525 I'm buying! ps. why is this one guy being such a c.u.n.t. in the comments?

posted on 17 Aug 2011, 14:06

39. Corgan Bruce III, Esquire (unregistered)


S&P?

The same guys who gave stellar ratings to Fanny Mae, Freddy Mack, General Motors, and Citibank before the big bust and major bankruptcies and bailouts?

Yeah...GTFO.

Nobody takes these anuses seriously anymore, they're a running joke.

On a side note, Ben Bernanke is a buster.

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