Is Google’s share price about to crash?

Could be about to follow Apple.

Following the poor performance of Apple shares over the past 8 months, many investors are starting to wonder if Google shares are about to follow a similar fate.

Apple’s share price has dropped from over US$700 in September 2012 to US$440 in May 2013. Over the same period, Google’s share price has increased from less than US$700 to over US$900.

What lies Beneath

Apple shares now trade a relatively low multiple for a tech company. The company currently has a trailing PE ratio of 10.5x and a forward PE ratio of 9.9x (for year-end 2014). This shows that the market expects little further growth from the company after 2014.

On the other hand, Google is valued highly. It trades at 27x earning on a trailing basis and 17x on a forward basis.

The Steve Jobs factor

There is no doubt that Steve Jobs was a revolutionary thinker. His multiple successes at Apple and Pixar are testament to that.

When he died, many felt that Apple would struggle immediately. However, these fears were quelled as Apple’s share price rose strongly. When Jobs died in October 2011, Apple share price was at US$400. Then, following a few months of static growth, the share price rose steadily to reach its peak of US$705 in September 2012.

The share price then declined heavily, dipping to as low as US$390 in April 2013, before recovering to US$440 in May 2013.

Why has this happened?

There are a number of possible reasons for this decline, including:

  • Apple’s upcoming products lack the enthusiasm they had under Jobs and although their previous products remain market leaders, they now face strong competition from the likes of Samsung, Google and Amazon.
  • Now that a couple of years have passed many of the best ideas that Jobs put in place – the ipod, the iphone, the ipad - have been used up and any new products going forward will have to be ones that he was not involved with. While there is no disputing that Apple still has a great design team led by Jonathan Ive, they perhaps lack the final decision over which new product to go with. Steve Jobs was notoriously difficult to argue with and that was surely one of his greatest strengths in pushing through products he liked.
  • With Jobs gone, Apple’s rivals sense blood. They know that Apple’s x-factor is gone and have therefore been more keen to innovate themselves. In short, the fear that Apple will always be two steps ahead is gone.

In closing, Apple’s core consumers loved Steve Jobs. They went wild when he gave his speeches in his turtle neck at product unveilings. They lined up to meet him. They slept on the streets outside Apple stores to be the first to get their hands on his latest gadgets. They miss him… and the market has finally started to realise it.

Google, on the other hand, is a different story.

Photograph: Getty Images

Andrew Amoils is a writer for WealthInsight

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Labour to strip "abusive" registered supporters of their vote in the leadership contest

The party is asking members to report intimidating behaviour - but is vague about what this entails. 

Labour already considered blocking social media users who describe others as "scab" and "scum" from applying to vote. Now it is asking members to report abuse directly - and the punishment is equally harsh. 

Registered and affiliated supporters will lose their vote if found to be engaging in abusive behaviour, while full members could be suspended. 

Labour general secretary Iain McNicol said: “The Labour Party should be the home of lively debate, of new ideas and of campaigns to change society.

“However, for a fair debate to take place, people must be able to air their views in an atmosphere of respect. They shouldn’t be shouted down, they shouldn’t be intimidated and they shouldn’t be abused, either in meetings or online.

“Put plainly, there is simply too much of it taking place and it needs to stop."

Anyone who comes across abusive behaviour is being encouraged to email validation@labour.org.uk.

Since the bulk of Labour MPs decided to oppose Labour leader Jeremy Corbyn, supporters of both camps have traded insults on social media and at constituency Labour party gatherings, leading the party to suspend most meetings until after the election. 

In a more ominous sign of intimidation, a brick was thrown through the window of Corbyn challenger Angela Eagle's constituency office. 

McNicol said condemning such "appalling" behaviour was meaningless unless backed up by action: “I want to be clear, if you are a member and you engage in abusive behaviour towards other members it will be investigated and you could be suspended while that investigation is carried out. 

“If you are a registered supporter or affiliated supporter and you engage in abusive behaviour you will not get a vote in this leadership election."

What does abusive behaviour actually mean?

The question many irate social media users will be asking is, what do you mean by abusive? 

A leaked report from Labour's National Executive Committee condemned the word "traitor" as well as "scum" and "scab". A Labour spokeswoman directed The Staggers to the Labour website's leadership election page, but this merely stated that "any racist, abusive or foul language or behaviour at meetings, on social media or in any other context" will be dealt with. 

But with emotions running high, and trust already so low between rival supporters, such vague language is going to provide little confidence in the election process.