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Sunday, July 10, 2011

TechCrunch, stick to tech

Everyone has their strong suite. TechCrunch is one of the best technology blogs out there. But when they try to do financial assessments, they suck. They recently wrote an article about how Google+ added some $20B to Google's valuation.  (The article was as superficial as they come, and that is why they need to stick to what they do best, and leave the financial assessments to blogs like mine.)

Here is the real financial assessment:

From the low-to-the current rally high (477-550) Google appreciated some 14.8%.

Quite a move. But looking past the obvious, the market (in this case the Nasdaq which better represents Google) had a +10% appreciation in the same time frame.

Google saw a market differential of approximately 4-5%. So 15% of that $20B was purely due to the overall market movement, which leaves 5% (or $1B) to company specific data.

Basically, the market maybe placing a $1B due to Google+.  And despite the nice move on GOOG, the market is currently pricing Google's businesses with an ex-cash multiple of 16.5. Considering its growth, and prospects, not pricey by any stretch of the imagination.

TechCrunch, stick to what you do best, providing information and access to insight like the video embedded below, not financial fluff.

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