Google Shares Spike 6% After ‘Alphabet’ Restructuring | Hacker News Reader

Google Shares Spike 6% After ‘Alphabet’ Restructuring

techcrunch.com

74 pointszhuxuefeng199420 comments

So? It's after hours trading. Its silly to pretend that it's a real 6 percent boost. Let's see the price tomorrow. Thats when you can say this is a legitimate spike.

And regardless, even if there is an impressive increase in regular trading, I don't see why that's surprising... this would appear, at least on the surface (which is what Wall Street reacts to when you consider the scale of a day), to be a good move.

Wasn't it up over 4% before trading closed?

Yes. The relatively small trading volume is meaningless.

Are there any studies on after-hours movement vs gap return?

I wouldn't call it meaningless but it's absolutely different than a spike during the trading day. Nasdaq shows 315k shares having traded AH, about 17% of what traded during the normal session.

I've seen gap-fill studies on big moves in general but never one specific to AH moves.

But shouldn't 17% of the trading volume of a massive company like Google be much larger than 100% of the trading volume of most companies, and therefore very accurate? Isn't this plenty of liquidity to make money if the prices was predictably off?

No, because the AH session uses a separate order book, it has much less liquidity. You can see one 1000-share lot move the stock $5. During the normal session, it would've moved it under $1, possibly just pennies.

It's possible much of this move was short sellers who chose to cover AH today. It's also possible that there's a lot of smart money buying AH and we'll see it grind higher tomorrow.

Sorry, I still don't understand! I can imagine that AH trading would have a tenth of liquidity in the sense that a 1000-share lot in AH trading moves the stock $5 but in normal hours it's just 50 cents. But if stock A has 100 times the trading volume as stock B, wouldn't AH trading of stock A be as liquid, or more liquid, as normal trading of stock B?

I don't know much about stocks. Why is after hours different?

The volume for after-hours trading is significantly lower as there are fewer exchanges open. 4PM ET is deemed the traditional end of the day for trading.

Also, most people can't trade after hours. So this price is artificial, in the sense that a lot of holders of Google stock wouldn't be able to sell at this 6% increased price.

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nice !

https://www.google.com/finance?q=google&ei=KrHJVePTLcSXUOO9v...

is 0.19 % down ?

I honestly don't understand why the stock price would increase with this. It seems to me that all they did was add a layer of bureaucracy (or just shuffled it around).

I assume it signals that they will be investing more heavily in the non-Google portions of their umbrella. It also signals that they are going to keep Google as a very ad-focused company in their banner.

The closest thing I can come up with is that the're modeling after companies like this:

http://www.textron.com/

Textron owns Bell Helicoptor, and EZ:GO Golf Cart company, among ~12 others, but the stock is all Textron stock.

I guess its kind of like internal diversification. I realize Google is a decently unique company, so I'm not sure exactly why they did what they did, but the model they jumped to seems common enough.

Or, Berkshire Hathaway

It gives the market more financial transparency into how the core business is doing, w/o merging in the effects of these other projects. More transparency means more accurate pricing, and thus a more reliable investment

I heard the opposite. That they won't have to disclose how google is doing if they don't want. Just as Amazon doesn't have to release AWS numbers.

Probably because stock traders smell creative accounting here. Companies usually do that to minimize the taxes they pay, hence maximizing their shareholders’ profits.

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