We may get a short term hit with the forthcoming litigation update. Hoping it is nothing that impairs the business.

Markets tend to associate uncertainty with negativity rather than positivity, so whilst I obviously don’t know I predict a higher chance of the stock rising after the announcement than falling.

Ben Graham gave an example in which two companies in a legal battle would often both have a falling quote despite the legal battle being a zero sum gain with one receiving and the other losing the same capital. He used that example to illustrate how uncertainty irrationally leads to lower prices.

Furthermore Google’s legal departments will be working overtime to re-frame its operations to help its defense, and probably doing so in engenious ways that are beyond my intuition.

I noted for example the Search Circle feature (and other search mechanisms rumored) added to Android to have search *built in* rather than solely in the Chrome browser default; it is a search producing ads, anyway I’m rather certain a decision like that is done specifically with a careful study of the legal harm or benefits for their case.

I imagine by the time the legal situation is over and a little time we passed furthermore, Google’s multiple will gradually rise above 24, and earnings won’t be impacted meaningfully. (Of course it can be dragged down with an overall depressed market that can happen unpredictably, but relative to its peers it will at some point trade at nearer multiples than it is today.)

- Manlobbi