Why Google's Stock Just Plummeted

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A rare misstep combined with worse-than-expected quarterly numbers to send investors into a panic.

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If you're on Twitter or watching the stock market, it's been a very interesting past half an hour. Google's stock hit the skids, falling to its lowest level in more than a month in the span of just about 10 minutes. What happened?


Well, at 12:30pm, precisely, Google accidentally sent its third-quarter financial numbers to the Securities and Exchange Commission. The press release included in the transmission of the information even had the equivalent of a TK in journalism. In the spot where the company's CEO normally has a statement, the press release read, "PENDING LARRY QUOTE." The unexpected early announcement might have been enough to freak out investors, but on top of it, Google missed both top (revenue) and bottom (profit) line expectations.

What's truly astonishing to me, as a non-investor, is the speed at which the market incorporates the new information. At 12:30pm Eastern, right before the news broke, one Google share cost $754.60. Two minutes later, the price was $736.91. And by 12:34pm, the shares were down to $706.78. That's tens of billions of dollars in market cap erased in the span of a few minutes.

Now, expect to see a lot of stories trying to answer the question financial advisor and blogger Josh Brown posed, "Which meme will catch hold: $GOOG miss means $FB screwed this quarter OR Facebook is kicking Google's ass?"
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Alexis C. Madrigal

Alexis Madrigal is the deputy editor of TheAtlantic.com. He's the author of Powering the Dream: The History and Promise of Green Technology. More

The New York Observer has called Madrigal "for all intents and purposes, the perfect modern reporter." He co-founded Longshot magazine, a high-speed media experiment that garnered attention from The New York Times, The Wall Street Journal, and the BBC. While at Wired.com, he built Wired Science into one of the most popular blogs in the world. The site was nominated for best magazine blog by the MPA and best science website in the 2009 Webby Awards. He also co-founded Haiti ReWired, a groundbreaking community dedicated to the discussion of technology, infrastructure, and the future of Haiti.

He's spoken at Stanford, CalTech, Berkeley, SXSW, E3, and the National Renewable Energy Laboratory, and his writing was anthologized in Best Technology Writing 2010 (Yale University Press).

Madrigal is a visiting scholar at the University of California at Berkeley's Office for the History of Science and Technology. Born in Mexico City, he grew up in the exurbs north of Portland, Oregon, and now lives in Oakland.

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