The Day After: Google Stock Down Nearly 4% After Stock Split News

CEO Larry Page did a good soft-shoe routine yesterday explaining the company’s new stock-split scheme amid results that generally beat expectations, but some investors are not buying it. The stock at the moment is trading nearly four percent down (around $23) at the time of writing.

Part of this could be to do with classic investing behavior: investors were hungrier for the stock before results in anticipation of good news and that drove up the price. Just before the results the stock had a five-day high of $651 per share. Now they are trading at around $627.

But the other main thing seems to be that stock split. Citi analyst Mark Mahaney (via Investors Business Daily) noted that it’s not that investors are disappointed with the stock-splitting scheme, but that just many hadn’t expected it. In the Founders’ Letter also out yesterday, Page had referred to investors supporting the scheme.

Google’s first-quarter results beat expectations, with revenues of $10.65 billion for the first quarter. Minus traffic acquisition costs, Google pulled in $8.14 billion in revenue compared to expectations of revenue of $8.1 billion (minus traffic acquisition costs).

In overall strong earnings , it however had a few declines: in the U.S., its single biggest market, sales were actually down quarter-on-quarter. They were $4,874 million, compared to $4,980 million in Q4 2011. Revenues in the UK and the rest of the world, the other two regions broken out by the company, were both up on last quarter. All showed year-on-year growth.

Google+, its new social effort, now has 170 million users, and yesterday Page said it was showing “impressive engagement” but a question asked during the Q&A, about why it was investing so much into Google+, seems to point to analysts and the investors who listen to them are perhaps not yet convinced about this latest effort, either.