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Still More Google IPO Speculation
KaffeineKitty writes "SiliconValley.com is reporting that Google will be required to begin filing financial reports with the SEC beginning April 30th. According to the Securities and Exchange Act of 1934 companies that have $10 million or more in assets and 500 or more shareholders must file quarterly reports with the SEC just as a publicly traded company does. Since this is generally an undesirable position for companies to be in most observers feel that Google will now file an IPO. Google officials are of course not commenting. Whether or not the Google IPO, if and when it finally happens, will make anyone money still remains to be seen. For more information on the possible Google IPO see Google IPO Central."
They've never done religious holidays. They have done Season's Greetings every year in December.
If they did not want to do an IPO, couldn't they split up the activities? (Google ads, google servers etc.)?
That could turn ugly, as the departments would have to start charging each other for services... and there could be in-fighting that doesn't exist in the present setup.
It'd be easier to just report and not issue an IPO.
Either the current controlling people can keep 51% of the stock, which they probably will, or the company could adopt a poison pill strategy, that says that something undesirable will happen if someone gets more than 51% of the shares.
I've had enough abrasive sigs. Kittens are cute and fuzzy.
They have tons of cash, so why can't they just to a cash stock-buyback from all but 499 of their shareholders?
A company usually nearly-depletes its cash reserve before going IPO... So the fact that they still have cash indicates they're not so likely to IPO any time soon.
Because google aren't offering all their stock up, I think it was 30% that will be buyable through the stocks. Anyway, I think the people at Google would be mad to offer too much up, they want strict control but the money that comes with losing a little control. So they'll settle for slightly less control and much more money so the money from 30% of stocks + 70% control, win-win.
If you are going to IPO your company, traditionally you only IPO less than 51%, so the current owner(s) keep their control. Microsoft can buy up 25%, so long as 51% is not on the market, and in the hands of individuals, it won't matter what they want -- they will just be investors who have to put up with google wants to do or remove their money. Then again, if nobody owns 51% of the company, Microsoft could be a player, and gain some control. But the point is that microsoft could only get that option if the google owners give up control with the IPO.
Google has a choice of going either with bookbuilding, the Dutch Auction, or a combination of both. It is clear that the former will result in arbitrary pricing and preferential allocation, often resulting in underpricing and significant initial returns.
On the other hand, one of the implications of the Internet is bringing transparency to the marketplace. In consequence, going with the Dutch Auction will result in non-preferential allocation and equal access to all investors. It should also find the market clearing price of the shares, and in theory, be less volatile since there should be less market activity with the stocks. In addition, less underpricing should occur, resulting in more money for the company.
The main problem that Google will have to face goes back to the issues associated with preferential allocation. Firms often get quite a bit of leverage with preferential allocation. Loyalty to favored investors who have invested in the past, and potentially in the future is still of importance on Wall Street, and a paradigm shift for them may not be easy to come by. Hence, some of the main costs with the Dutch Auction is that there may be no institutional support, as companies are quite reluctant to go against Wall Street.
Two problems with this at the moment.
1. If Google goes strictly bookbuilding, day traders will certainly not get an allocation so that they can flip the stocks after the initial raise in price due to underpricing. Google will also prefer to avoid people who add much volatility to their stock.
2. If they go with the Dutch Auction, again, day-traders may not get an allocation if they underbid. Moreover, the market clearing price will be determined, and chances are, there will not be much, if any underpricing. The market clearing price also takes into account the fact that a lot of people are going to be overbidding.
Hi Point firearms does this. They make the shittiest, crappiest, ugliest, cheapest guns in the U.S. While they market their products responsibly and do everything they possibly can to ensure their products don't go to criminals, their status as seller of the cheapest guns available makes criminal use inevitable. Seeing itself as a prime target for predatory lawsuits, Hi Point has broken their company up in just the manner you describe. Each individual model of firearm is manufactured by a different by a different sub-company.
I assume you meant $100,000 as the average salary.
That's not a bad salary.. But, Google is in the heart of Silicon Valley, where even a shitty two bedroom house is $500,000. A nicer four bedroom place is over $1,000,000. The most affordable $300-$400,000 places are small apartments being sold as condiminiums.
At least the rents have dropped. At the peak of the bubble, I was paying $2,200/month for a one bedroom apartment in Mountain View - not far from the Google office. Now, it's around $1,300/month.
Google hasn't done an Easter logo since 2001. This is nothing new.
It's hard to be religious when certain people are never incinerated by bolts of lightning.
What the hell are you guys talking about? 30% offered in the IPO? Whose ass did you pull that number out of?
Even at the height of the boom most IPOs were on the order of 10%.
Also, you're not selling existing shares, you're creating new shares. An IPO does not transfer ownership of existing shares, it dilutes everyone's ownership.
Any attempt to corner the market on the "float" (i.e. shares being traded) by buying shares on the open market would do nothing but drive the price to insane heights. MS (or anyone else) would be idiotic to try it.
I really doubt they are losing money.
They pay me an average of over $60 a day for serving ads, and that's on just 7500 impressions. Multiply that up to 18 million searches a day and it should come to nice tidy sum.
There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
You do of course realize that shareholders in Google own a significant percentage of the company as it is right?
Just because a company is private doesn't mean it doesn't have shareholders to answer to.
The world is neither black nor white nor good nor evil, only many shades of CowboyNeal.
Look into the cost of quarterly SEC filings. It's usually several million $ paid to an auditing and accounting firm, quite an expense for NO benefit period. This also means that your data is now PUBLIC, eliminating any advantage to staying privatly held.
So, you go public with a small (10-30%) amount of newly issued stock. This gets your company a LOT of money, and gives your employees some reward as well.
Now you're filling quarterly, and your details are disclosed to the public, but at least you got some benefit out of it.
It's all about "if we have to anyways, we might as well benefit while doing it."
Eventually, very successfully public companies have to think more about their stockholders than their customers. In fact, they're legally obligated to their stockholders. This is why many big companies effectively 'sell out'.
Not having shareholders is awesome (at least from my point of view). You can do cool and interesting things that you want to do, and not have to constantly worry about making the decisions that will maximally increase the stock price.
make world, not war
Basically if you want to invest in the initial price offering you must find a broker that can get you in on it. Most IPO shares are purchased by large institutional investors, but individual investors can get in on it with a little luck. I know E*Trade lets some investors get in on IPOs, but I'm not sure about the other online brokerages. For some of the basics of getting in on an IPO see these articles on IPOs on The.Street.com. You may need to contact several brokers before you find one that can help you, if at all. Of course everyone can buy once trading starts.
The price-setting is a bit of a black art (think: complicated regex work) based on both company valuation and market appeal. It's not unheard of for the initial valuation to be changed the day before the IPO based on huge market anticipation and the feeling that people will pay more.
"It was a summer's tale: Just a boy, his Linux, and a head full of dreams..."
Yes. An IPO will dilute the value of existing shares. So if a company does too many IPOs, it will undermine investor confidence (ie. investors won't believe that the value of their shares will be maintained), and drive their share price into the ground.
That's the "first tier" strategy - because of that, companies don't do an IPO unless they really need the cash (and it would be unwise to get it through debt financing). This means that companies who do an IPO are seen to be short of cash. If investors believe that shortness of cash will adversely affect their business, this will drive share price down even more than the dilution.
Of course as with any such "rules", they're more guidelines than actual rules - google managers have demonstrated many times that they aren't stupid, so they may have some reason for doing an IPO while they have lots of cash that is a little more advanced than the bare 'basics' I've outlined here. One such reason may be that they have too much debt, and want to fix their D/E ratio with an IPO ... this isn't uncommon, but I don't know how much debt (if any) Google currently has.
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"I love entertainment, as long as it's clean"