The price of Google shares reached $500 on Wall Street this week as the internet search company continued a phenomenal rise that has turned it into one of the United States’s most valuable enterprises.
Google’s shares were priced at a mere $85 when the world’s favourite search engine went public on Nasdaq in August 2004. They quickly became the market’s best-performing stocks. Three months later, the shares reached $200 and in November last year they hit the $400 mark.
In early trading on Tuesday this week, Google’s share price rose by $9,21 to $504,26, giving the company a market value of $154-billion.
The benchmark came only eight years after Google was founded in a Silicon Valley garage by two Stanford University graduates, Larry Page and Sergey Brin. Both aged 33, the pair each own shares worth more than $15-billion.
According to the financial information firm Bloomberg, 33 analysts who follow Google still recommend buying shares. Four rate the stock as a “hold” and only one is advising clients to sell.
But some began to urge caution. Scott Kessler of Standard & Poor’s in New York said: “A lot of the rewards are already priced into the shares. Now people should start thinking about the risks.”
At $500 a share, analysts say Google is valued at 37 times its likely earnings for next year. — Â