Google Share Price Drops 8% on Recession Fears

A comScore US industry report, published earlier this week, indicates a decline in the key measure for how the Mountain View-based company is getting paid by advertisers, and that freaked everybody out. Despite Google's repeated statements that any upcoming recession would not affect it, it saw an 8 percent fall in share value just from one day to the next.

Many analysts have cut their 12-month target on Google, Reuters reports. UBS' Benjamin Schachter cut from $650 to $590 - a new low among bullish Wall Street analysts, the media agency announced, while BMO Capital also cut the stock price target for the Mountain View-based company from $690 to $590.

Meanwhile, Google shares hit a low of $446.85 in Nasdaq trading on Tuesday, but recovered a little to $453.98 by the end of the day for traders. Whoa, horsie, many would be inclined to say, taking into account that so far the stock has been off nearly 35 percent this year compared to the previous. The fall was caused by the sharp decline in technology stocks in the face of recessionary economic fears.

"Everybody owns it. When negative things start emerging and investors start trimming a bit, that creates a waterfall effect," Jefferies & Co analyst Youssef Squali told the cited source. "The stock is a 'crowded long," Squali continued, as he cut his rating on Google to "hold" from "buy" a month ago, citing slowing growth trends. "Google is over-owned," he complained.

The comScore report showed that there was a 7 percent decrease in ads being viewed on the site throughout January, compared to the same month of the previous year, and this happened even though Web searches run through the Google search engine increased by almost 10 percent over the same period of time.