Google stock takes a tumble

The Associated Press is reporting that Google's stock dropped about 5% today. The tumble means a loss of about $12 billion in market capitalization. Other tech stocks also took large plunges today, with Apple down about 6% ($9 billion drop in market cap) and Cisco fell nearly 9.5%, costing its shareholders about $19 billion in market value.

The correction in Google's stock price shouldn't come as a surprise - no stock goes up all the time. But, the timing is odd, and reflects investor's ignorance of technology in general and tech companies in particular. The drop came about because of a warning from Cisco that demand is down (and partially blaming it on the real estate/mortgage industry woes). I guess that investors lump all technology stocks in together, but Cisco and Google couldn't be more different, and investors really don't understand the difference between a HARDWARE (Cisco) and a SOFTWARE/ADVERTISING (Google) company. The fact that investor's panicked and started dumping tech stocks shows a problem with how American's invest - i.e., they don't do enough research into the companies in which they invest.

(sidenote: Americans should be far more worried about the Dollar's continuing weakness, especially with rumors of China threatening to dump Dollars in favor of the Euro.)

Google is still on an upward track, with huge earnings and enormous growth potential. The ceiling for Google is still nowhere in sight, so while new investors might not be getting in on the ground floor, those savvy enough to do so might hop on now. Expect a bounce back for Google's stock soon.