GOOG Earnings Beat, But Stock Falls?

So the big question for beginning traders is always: why did GOOG’s stock fall but it beat earnings? The easy answer is that the announcement was already priced into the security. You see young traders out there, just because a company beat’s expectations for earnings DOES NOT mean that the profit was not already priced in.

For example, investors out there already expected GOOG to beat earnings. As such, they bought the stock up nearly 8% ahead of earnings. But this was too much! Their pre-earnings expectations were TOO HIGH. And so we have a falling stock on great earnings – one of the many wonders of the stock market!

Pre-earnings = GREEN / Post-earnings = RED.