AllThingsD » Scott Kessler

Google's Motorola Buy Has Wall Street Selling

Peter Kafka — Tue, 16 Aug 2011 19:58:43 +0000

Larry Page doesn’t seem to care about Wall Street’s view of his company. But if he did, he’d notice that investors don’t seem to be happy about the Motorola deal.

Google shares closed at $539 Tuesday, down more than 3 percent for the day. And down 4.4 percent from last Friday’s close, when no one had any inkling Page wanted to drop $12.5 billion for a pile of patents and a hardware company.

Meanwhile Standard & Poor’s — yes, that Standard & Poor’s — has dropped the stock from a “buy” to a “sell.” Here’s analyst Scott Kessler’s note:

“After further consideration of GOOG’s plans announced yesterday to purchase Motorola Mobility, we see greater risk to the company and stock. We expect the transaction to be consummated next year, but later than early 2012, which GOOG indicated. Moreover, despite MMI’s extensive and valuable patent portfolio, we are not sure it will protect Android from IP issues. We also believe the purchase of MMI would negatively impact GOOG’s growth, margins and balance sheet. Based on revised DCF analysis, we are cutting our 12-month target price.”

Again, always dangerous to read too much into a short-term swing in any company’s stock. But today’s conventional wisdom (again! caveat emptor, etc.) is that Google has spooked Wall Street because it’s not really sure what Google is thinking here: Is it really just buying patent protection, which was the company’s message yesterday? Or is the big plan to create an integrated soup-to-nuts software/hardware mobile phone company, a la Apple?

The latter, Kara Swisher argues convincingly today. And if that’s the case, Page might mollify Wall Street simply by saying that out loud. If, you know, he cared about mollifying Wall Street.

Priceline: S&P Advises Taking Profits After Big Run

Eric Savitz — Fri, 10 Apr 2009 14:50:12 +0000

Standard & Poor’s analyst Scott Kessler late Thursday cut his rating on Priceline.com (PCLN) to Hold from Buy on a valuation basis. Kessler notes that the stock has rallied 38 percent off an early February low, and is closing in on his $100 price target.

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S&P Sees Microsoft-Yahoo JV, Google-Apple Tensions

Tiernan Ray — Wed, 31 Dec 2008 16:15:24 +0000

‘Tis the season to make year 2009 predictions. Today, Standard & Poor’s analysts released their predictions for the Internet in 2009. Scott Kessler, Internet analyst with S&P, says Microsoft (MSFT) and Yahoo (YHOO) will “finally bury the hatchet” next year “and decide to join forces to better compete against Google” (GOOG). Kessler says Microsoft won’t buy Yahoo (well, they’ve already said they were no longer interested in that), but rather pursue a joint venture “related to search.” He thinks that could lift Yahoo shares, to which he assigns a “Buy” rating.

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