Though the famed search engine company had been struggling to make a profit for much of 2012, does the premature publication of its third-quarter earnings figures for 2012 setting the company up for a disastrous financial precedent?
By: Ringo Bones
2012 seems to be an off-year for Google – profits wise mainly due to the falling advertising rated as users use their mobile devices to use the famed search engine. But the greatest gaffe so far is when Google prematurely released their third-quarter earnings figures for 2012 that showed 20% profit fall. Sadly, it was released three and a half hours earlier than expected, way before the trading bell ay the NYSE was sounded to close the trading day for Thursday, October 18, 2012 – thus causing Google’s share prices to tumble by as much as 10%, their greatest single-day loss so far. Not only that, trading in Google stocks had to be suspended for two and a half hours to wait for stock-market correction in order to reevaluate the current true valuation of Google’s stocks. But are there any hard lessons to be learned in this premature release of earnings figures debacle?
As Google’s top brass blamed a financial printing firm for the blunder, they too had scrambled to a conference call to “massage” the mistake to avoid sparking a panic among their stockholders. The pandemonium the premature release of Google’s third quarter earnings caused in the New York Stock Exchange must have reminded everyone old enough to comprehend the Black Monday stock-market crash of October 19, 1987 – twenty five years ago today. Releasing your quarterly earnings figures too early is akin to releasing the day’s winning lottery numbers two hours before the draw day’s cut-off time. In sympathy to those whose lifesavings are currently invested in Google stocks, let’s just hope that the market’s correction mechanism will make the stock price freefall less disastrous than it seems.