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Google forced to suspend shares after email knocks $20bn from value Friday, 19th October 2012
When emails go wrong: a premature release of Google’s latest quarterly results wiped USD 22 billion from the search engine’s value on Friday.
Shares in Google were suspended after an email sent from the company’s financial printers RR Donnelly to the US stock market authorities revealed the world’s largest search engine performed beneath Wall Street expectations for the quarter.
Stock fell 9 per cent before being halted, and then recovered slightly to close down 8 per cent after resuming. With the release still pending a leading quote from Google chief executive Larry Page, there was no gloss added to the firm’s performance, which missed expected profits for the third quarter. Figures showed Google earned USD 9.03 per share, well beneath analysts’ consensus estimates of USD 10.63.
Despite the surprise release, reaction for the results themselves are not expected to have a long-term effect on the tech giant. Gary Buchan, a director of digital marketing agency, Render Positive, described the results as “nothing more than a blip”:
"In the medium to long term, Google is extremely well positioned to capitalise on investments it has made in huge data processing facilities that can be applied to several potential areas of new growth.
"But in the short term, which is all Wall Street cares about, this is unlikely to be the only blip in earnings reports. There are probably a few ugly reports in the pipeline yet... Google has fallen foul of the global advertising slump, but it's fundamentally future-proof.”