Despites Google’s phenomenal success, one goal seems to elude them. S&P makes adjustments on their stock indices from time to time. When it was determined Gillette would be dropped from the list this year, many speculated it would be the rising star of the stock market, Google.
Google debuted on the stock market last August and did quite well. Their stock is up 60% for the year at over $317 today. Some predict it will easily hit $350 and this is despite the fact they just dumped over 14 million share of stock onto the market.
One catch may be the level of stock in the public float. As Jonathan Berr of “TheStreet” points out, “At least half the shares of the company also have to be in a public float. About 37% of Google’s shares are held by insiders, compared with 14% at Microsoft, 11% at Yahoo! and 9.9% at Dell according to Computershare calculations posted on the Yahoo! Finance site. All three of those tech heavyweights are in the index.”
One issue may be the relative youth of Google. As Berr points out, S&P looks at a company’s stock track record and profitability. In other words, they just haven’t been public traded long enough to really let S&P get a good feel for them.
While Google may well see its membership in the S&P 500 or 100 in the coming months, there are many companies that haven’t made it yet either. Besides, Google’s stock price is continuing to climb and many are still excited over Google’s prospects for the future.
John Stith is a staff writer for murdok covering technology and business.
