Slashdot Mirror
Google IPO Swami
The Google IPO Swami writes: "I'm running an experiment and Slashdot readers would be good contributors. As you may know, Google recently announced that they will be using a unique dutch auction structure to price shares of their IPO. Instead of having the underwriters determine the opening price, the price will be set by the demand of investors that register to participate. I'm interested in how well the public can estimate this demand and the price of the shares to be offered. I'm giving away free shares in Google to find out. The person that comes closest to estimating the opening and closing price of the stock on the IPO date will win shares in the company."
Here goes nothing ...
20$ - 80$ ?
One thing that this data will almost certainly show is that data entered today will we totally wild guesses and be totally disconnected from the real factors that determine the IPO price.
Macro-economic factors such as interest rates, price of oil, unemployment, and who the US President will be on the date of the IPO are still unknown. Hey, even the date of the IPO is still an unknown!
Bookmark the site and revisit it as Google gets further along the road to IPO. That's the only way to win at this game unless you're an extremely good guesser.
Anyone else think its good that Google isn't releaseing guidance about upcoming quarters? /all spelling errors intentional
Kiss my shiny metal ass
Martha Stewart has some "special" information she passed in to me.
Well based on what I have researched ... $65
nothing, they went broke because of this and your prize is worthless!!
Do you have any shares in that watermelon flavour? That's my favourite.
opening: 23.65 closing: 46.13
------
[insert funny
Why be vague on this detail? Is the reward a fixed number of shares, a dollar figure translated into stock, or what?
The person that comes closest to estimating the opening and closing
You mean the person that guess the first buying bid of the day and the price of the last buying bid of the day... I bet the first one will be higher than the last one. I like the 20 - 80 from the first poster but has it backwards. I bet its 80 and 20.
The contest entry form has some interesting subtexts to them...
3. Do you intend to place a bid for shares in the Google IPO? (Yes/No)
4. What price will you bid for Google shares? Enter 0 if you do not intend to bid. The value must be between 0 and 999, inclusive.
5. How many shares do you intend to bid for at this price?
Enter 0 if you do not intend to bid
There's the true motivation for this exercise. The person running this contest clearly states on his site that he's going to try to sell the results of the survey to people who want to have some way of peering into a crystal ball and determining what people would be willing to pay for Google before the dutch auction price is determined.
The day-trader investors who ususually love IPOs hate this Dutch Auction system because it gives them less room to try to buy up the early shares and then sell them the same day to people who wished they had gotten in on the IPO and are now willing to pay more to get their shares at market prices. (Smarter investors would place a limit order rather than a market order and just wait for the day-one spike to wear off and the price to be more in line with reality.)
11. Would you like to be contacted by someone to help you bid for shares in the Google IPO? You will receive one email if you say Yes. (Yes/No)
Talk about "highly targetted e-mail marketing list." That's sure to go to the highest bidder too...
This guy most certainly has a right to make a buck... we just should be smart enough consumers to realize that he's doing so by running this, and possibly withhold our information if we deem it too valuable to hand over.
Opening: $16.75
Closing: $53.20
Yes, I pulled those numbers out of my *ss, exactly as everyone else will.
My <1000 UID is with a hot chick
Does this seem like a pre-IPO buzz-generator to anyone -else-?
Maybe I'm too cynical.
Why don't other companies also use auction systems to do IPOs? It seems like all of the big financial companies get basically free money for organizing the same thing
It looks to me like the only piece of info needed to register is an e-mail address. With people here capable of supplying thousands of e-mail addresses each, I think you're looking for abuse.
I guess the price will be somewhere near $250 per share on the day of the IPO and down around $1.94 about 4 years later. Be careful when investing in those tech stocks, you can get seriously burned. But this is just a guess, IANACPA or investment advisor. YMMV, void where prohibited.
Well, this could show what people value google at... or more precisely, how profitable investors think it is. Either way, I'm holding my cards. This isn't a stock I'm gonna buy. I'm not into world domination.
Only the purest of souls seek enlightenment. Everyone else just wants power.
we need one more story mentioning some form of dutch for the trifecta.
how often does that happen.
I have a get rich quick scheme and I need your help. Those helping me can be at the bottom of my pyramid scheme, and will get millions of dollars, 3" of wang and all the heart meds you can count with a Cray. Just invoke my ip and I will make you a nigerian just for clicking. I promise....really
Slashdot, where armchair scientists get shouted down and armchair theologians get modded up.
Opens at $23.50, closes at $67.38.
I've got first dubs on $37.11 to open and $103.33 to close. Best of luck and may the best guesser win.
Is it fascism yet?
Great, let the people decide the stock prices. That way I'm sure Google stock will start out way overpriced.. giving the employee shareholders a grab at an awful lot of dough. After all, everybody loves Google. People have a tendency to use their emotions instead of logic to make purchases. The question is, will Google make money to stay afloat?
If you made the choice of betting on $1, you would get $10 worth of stock. If you made the choice of betting on $200, you'd get $2000 worth of stock.
Now obviously you don't want to bet too high because if you do then you won't be right at all. But you will tend to bet on the high end, rather than the low end.
P.S. Everything I know about Economics I learned from The Price Is Right.
Google will have an IPO value of $100!
$18.24 opening, $42.81 closing ;)
I wonder if the initial price will end up higher than this system was designed to determine.
From my understanding, people bid on it at any price point. When they decide to create X shares, the top bidders will receive those shares, but will pay the price point of the lowest bidder. If this is true, what's to stop me from bidding $500/share to guarantee I get to take part in the IPO? Since I won't have to pay this price, and I probably won't increase the per-share price significantly, an individual doing this could easily be guaranteed as many shares as they like. What happens when a large number of people realize this and it artificially increases the price?
Is there something to prevent this? Is this a desired action (maybe from Google's perspective)? Or am I just completely missing something here....?
The answer is $42. 42 is always the answer.
Sailors. Oh man!
does this person really think that getting wild guesses from thousands of non-investor types will help him determine anything?
I f0rw4rd3d it t0 all my fr13ndz, aNd now 1'M a multi-B4ZZZZ1L10NAIRE!!!
Then why don't you go sit on your yacht and shut the fuck up instead of posting here?
Opening Price: 75cents
MiddayHigh: 150 dollars.
Closing Price: 25 cents.
$30.00 -> $42.02
Opening: eleventy-billion
Closing: $Texas
Send $2.7 million my specal escrow service and I send you full story about Google IPO. Hurry now important very!
50.23 open
55.5 close
what?
I'm interested in how well the public can estimate this demand and the price of the shares to be offered.
He speaks as though 'the public' is a different kind of public from the one that will be bidding on the shares. Gee, I wonder what use he could possibly have for getting a sampling ahead of time...
-Colin
Great idea! And you're a great guy!
I'm going to send you my 19 day old P-P-P-Powerbook as thanks!
-Jeff
Given the large amount of publicity Google's IPO is getting, and assuming the dutch auction will be pretty open to the public (I trust Google for that), the whole point of the dutch auction is to dampen the first day effect and make sure the company, and not day traders, gets most of the upside the market is willing to give it. Notice the assumptions up top, though... Theory doesn't always translate into real life.
And another thing: read the prospectus: the wall st guys are still getting a pretty good cut!
Google shares are going to be gold, so even if I give my modest guess $41.50-$41.55 for the open price :)
now im gonna pray.
almost as much fun as google bombing for the best place to shop for nigritude ultramarine, the breakfast of champions
...that you're a troll and everyone can check your posting history of failed "pfirst psots" to verify.
With SCOX stock (SCO groups ticker symbol) it has become a kind of sport
And if you thought that was boring you obviously havn't read my Journal ;-)
http://money.cnn.com/2004/05/10/technology/google_ scam/?cnn=yes
:)
At least the offer is for free shares instead of trying to con billions from us.
I think between $300-320 a share.
People don't exist to serve systems, systems exist to serve people.
tradesports.com has a futures market on the relative price of the IPO. There is another futures market for the time of the IPO
Not like I need to be rich anyway.
I'm probably at the karma cap. Mod up a funny troll instead, it lightens the mood
116.42
I've got 101 mod points and you can't have them!
As long as we're pitching services, :)
IPOFinancial.com is offering a Google IPO report for sale. It's a reasonable price if anyone is considering actually investing in Google's IPO. As many others have said already, the dutch auction system will put a spin on this which not many high profile IPOs have had (at least recently).
creation science book
Close: $14
I don't see why the price shoul be going up.
what value does goole have to offer?
divindend?
just let us know..
...You are out forty dollars bucks? Department of redundancy department?
Honey, I shrunk the Cygwin
opening 25.00 closing 73.95
meh
One thing I've noticed about the posters is they're not really sure why the dutch auction format is different than the normal IPO process.
In a normal IPO, the investment bank (or brokerage) sets the price, say, $20, then buys the shares off of the issuing company for $20. Any spread off of that goes directly to the brokerage (or investment bank).
This is a Bad Deal for the issuing company, because the spread should have gone to the company, not to the brokerage. Think about it: if MSDW priced a stock at $20, but were able to sell at $200, then the issuing company just lost $180! The brokerage, of course, made $180.
With the dutch auction, there will (or should be) little or no upside to google's stock because the price will be determined by how much people are willing to pay up front. In fact, it will probably drop on the first day, since people confused by this concept will try and flip, leading to a sell imbalance.
Depending on the shares that are to be issued, I'd say that conservatively google's stock should open at anywhere from $175 +- 8%, and drop about 15%. Why $175? Because -everyone- knows google, and companies that are well-known to the public trade at a premium.
The other interesting thing about google is that a savvy investor/hacker could manipulate the earnings by writing a virus that sneakily clicked on all those google ads that appear when you do a google search. Voila, instant earnings! With enough spread, you could do millions of hits a day, which translates to millions of dollars a day (thank you, adwords!)
We'll see.
If you live in the United States, DO NOT accept this wager. It is a violation of Securities and Exchange Commission rules to gamble on the price of stocks, except by investing in them.
I just realized - he's doing a bayesian average!
http://www.research.att.com/~volinsky/bma.html
There was a possibly apochryphal story about this. A plane went down in a large area, and they needed to find it. Nobody really knew what happened to it. The leader of the search team went and asked a bunch of pilots where they thought the plane was, after giving them the course, heading, speed, and whatever data was available.
Well, they took the answers, narrowed the search area, then found the plane pretty much where the consensus said it would be.
A bit of thought will give you the reason this might have worked...
open 31.78 close 26.53
CocknFagr is on teh spoke`!~!
Commie bastard!!
Dear Sir. Your contact information was referred to me by one of my trusted contacts, whose name I am not at liberty to compromize. I would like to approach you with reguards to a profitable Business Proposal, reguarding the transfer of TEN MILLION SHARES OF GOOGLE STOCK. For reasons I am sure you will appreciate, I ask that you keep this commucation confidential, and avoid it falling into the hands of any agents of the Nigerian Secret Police that may be operating in Your area. My name is Mabwano DeLacroix, and I am the Son of Sir LARRY PAGE, the recently Removed from Power Chairman of GOOGLE. If you have been following the events on Slashdot over the last few years, you will remember the big scandal that took place when Sir PAGE was imprisoned for alleged crimes against SCO without standing a trial.
I submitted this a while back, and it was predictably rejected, but if you really care about the Google IPO, take a gander at this article:
Actual excerpt from the rules: (Note that I'll never share your personal information with anyone, without exeption). I'll give the aggregated information away for educational use and other worthy causes. Email me.
Did you know that there are 2 classes of shares and
the series management holds gets 10x the voting rights of the shares being auctioned off.
Management gets to do what it wishes-- shareholders be damned.
I don't know about you, but this analogous to being handcuffed in the back of a police car.
I wouldn't touch this with a 1 parsec pole.
1. An unprecendented number of Slashdot geeks have started receiving massive amounts of spam after signing up for free Google shares. The email-harvesting www.googleiposwami.co seemed to be endorsed by /. editors by way of posting the article.
2. And in other /. news ... /. editors use spam techniques to make money from their subscriber base. CowboyNeal could not be reached at his new off-shore resort for comment.
From the front page of the article:
"This site is not operated by Google."
Someone's trying to make money off of Google's IPO!
What's GIGO?
Google in, Google out?
I don't really know what they want to achieve with this experiment. What does the average slashdotter
know about investing. I could be wrong however so...
$43.03 opening.
$63.04 closing.
TIAA-Cref does not like Google's share structure, for example. In short, it sounds like they believe Google will not be worth as much unless they take steps to make the management more "accountable" to the public. (Interpret it however you want to.)
What is the incentive to bid a penny higher? Of course you could big much higher just to "guarantee" that you get stock but the goal is not to guarantee that you get stock.
Here you are thinking of investors... but have you considred how many people that would want shares not as an investment but just to have?
I thought it was funny the survey was limited at 99 (though I guessed kind of low I think).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Why does slashdot post up garbage like this? I saw that the site wasn't affiliated with Google, After I signed up, because you retards linked straight to the survey.
My email address is going to be usless now, u fuckwads.
My GUESS... more like $80 opening, $40 closing by the end of the first week of Google trading, mid $20s, where it will stablize.. Or, if we geeks have anything to say about it... $60.22 (think about it...) or $31.415 (decimals shifted to adjust to a possible real world value of G00G stock.) This is like a dotcom, but they have been "developing" for a bit longer, so they might not crash 'n burn maybe.
well, that totally depends on the number of shares, that are released. I'd say $50 per share. Seems reasonable.
-------
1. Enjoy your job
2. Make lots of money
3. Work within the law
Choose any two.
"I might sell aggregated statistics about what people are estimating to investors" (from http://www.googleiposwami.com/rules.html)
Why are people submitting their guesses, for free? What's to say they're telling truth when they claim to have 10 shares to give away, at all...
Wake up, people.
So they can't take advantage of any first day fervor. Well, they can, but only by buying/bidding on the open market like anyone else.
What this system will do is ensure that Google's stock never has an up day for the forseeable future. It'll come out at $X and will fall steadily.
Also, first day trading should be relatively light, as each share won't trade hands 20 times on the first day.
Open:$42
...Nani?
Close:$42
Have google said what percentage of the company is being sold in this IPO? I can't see that information in their Form S1 filing but I may be overlooking it.
The filing says that the maximum aggregate offering is 2.7 billion dollars which presumably caps the launch price, though we don't know what it is capped to until the number of shares being sold is announced.
We can all take a number, and agree to sign the shares over to /. When the shares inevitable rollercoaster up and down, sell 'em at their peak, and distribute the profits in the form of free subscriber accounts for everyone!
This sounds an awful lot like the "baby" pool, where people in the office bet on the the date and time of birth of an office worker's baby or a worker's wife's baby.
How does the FTC view this kind of side betting on stock prices? Would their lawyers see it as gambling? And yes, I think it may well qualify as gambling because you will receive something of more than nominal (read, nearly worthless) monetary value if you win. At least, everyone buying the stock hopes it will be worth a lot.
That's bad for the company in many ways. The problem with that for the company is that there is now unrealistic valuations for their stock...what I've been calling the "beanie baby" effect. Much like the toy fads that sweep the nation with obscene prices for stupid $5 toys, IPO's have the same trouble. The initial price that the shares sell at is all that the company gets ....Right now there are no "stockholders" to please....it's all about what the company needs/wants to be successful! This doesn't affect those VCs and angel investors wanting to leave...they already got their X% of company shares immediately available to sell off...This doesn't really hurt them.
What typically happens is that the "old boys" on wall street undervalue your company shares when they post them, then of course overvalue your shares to all the clients! It's actually the ultimate in "legal" inside trading. What they're trying to do is sell their shares for as close to "market value" as possible. That means the company gets the most money for selling itself and also gets a stable investor base instead of being victim to an immediate "downturn" from a larger company [say MS] that might use it's buying power to ruin them. They are also trying to get investors that want to be part of google, not just those looking for a quick buck.
In all it's a smart strategy because they are using the stock market like it was originally intended...for a company to gain capital!
May 5, 2005??
Sorry about that.
Close yes, but almost certainly a little higher. Most winners will understand that the stock they own has that value. There will be some sales afterword though, and in general the seller wont be willing to sell for less than he KNOWS the stock to be worth. Other factors may play in though. If the value is less than people expect, they may lose confidence, and the price would go down. Again, not by much.
I won't join Slashcott. OTOH, If Beta goes live, I just won't be back until it's fixed. Sorry Dice.
If anything, this research should prove that markets are NOT efficient. Even as the world's largest and best developed economy, we've yet to reach the efficient market (such assumptions as: perfect and uniform information, etc). It's not that I'm saying efficient markets don't exist, but I hope this Google experiment proves it. Honestly, they're not making enough profit to warrant a high stock price given their EPS. I'm very curious, though. The dataset from this experiment should look interesting. Is the author going to release it free of charge to academics? I'd hope so.
Think about it for a moment. Does it really matter if you can outguess Google's IPO. Let's say you want to invest $100 in Google stock. If you placed one bid of $100, another of $50, %33.33, $25, $20, etc. If the price comes out to just under $20 then you've purchased 5 stocks worth a total of $100. Same with any other fraction of 100. (In case you didn't get it the first time, that was 100, 100/2, 100/3, 100/4, 100/5, etc.)
Of course investment firms are going to want to do more research and put some more thought into it, but for most of us it really shouldn't be that hard.
As was said before, IANACPA. Go ask someone who knows something.
I won't join Slashcott. OTOH, If Beta goes live, I just won't be back until it's fixed. Sorry Dice.
Google Corp.
Lagos, Nigeria.
Attention: The President/CEO
Confidential Business Proposal
Dear Sir,
Having consulted with my colleagues and based on the information gathered from the Nigerian Chambers Of Commerce And Industry, I have the privilege to request your assistance to transfer the sum of $2,700,000,000 (two billion, seven hundred million United States dollars) into your accounts. The above sum resulted from an over-invoiced contract, executed, commissioned and paid for about five years (5) ago by a foreign contractor. This action was however intentional and since then the fund has been in a suspense account at The Central Bank Of Nigeria Apex Bank.
We are now ready to transfer the fund overseas and that is where you come in. It is important to inform you that as civil servants, we are forbidden to operate a foreign account; that is why we require your assistance. The total sum will be shared as follows: 70% for us, 25% for you and 5% for local and international expenses incidental to the transfer.
The transfer is risk free on both sides via a process known as 'Dutch Auction' I am an accountant with the Nigerian National Search Engine Corp. If you find this proposal acceptable, we shall require the following documents:
(a) your banker's name, telephone, account and fax numbers.
(b) your private telephone and fax numbers ? for confidentiality and easy communication.
(c) your letter-headed paper stamped and signed.
Alternatively we will furnish you with the text of what to type into your letter-headed paper, along with a breakdown explaining, comprehensively what we require of you. The business will take us thirty (30) working days to accomplish.
Please reply urgently.
Best regards,
Larry Howgul Abul Arhu Page
You need a FREE iPod Nano
Do you know what aggregated means?
can't we just Google for it?
The real factor is "how much will this company allow us to lowball the price without just saying fuck them". Google chose the fuck them option ... I bet we will see a concerted effort to black ball them. The big financial institutions, and their preferred clients, wont let go of one of their most profitable scams without a fight.
Instead of giving away shares to whoever guesses closest to the the actual selling price, you could could have auctioned off your promise to supply a share in Google to the highest bidders. People will guess whatever number they like, but they will only bid up to where they feel the share is worth. If they think they can get it cheaper at the real Ggoogle auction, they wont bid that high. As a side benefit, if they bid too high you make money from your auction! If they bid too low, you are only out the difference between their bid and the actual starting price.
With the inflated IPO earnings actually going into the company it will be very hard for them to burn enough of it to go under anytime soon :) (That is unless wallstreet manages to throw enough dirt at them to scare investors, which they will undoubtedly try.)
Obviously the majority of the market volume is not bought by experts, wether they work at financial institutions is irrelevant.
:)
They arent experts, just more irrational public
Google recently announced that they will be using a unique dutch auction structure to price shares of their IPO.
They're gonna sell their stock on eBay!
Google makes money, and VA doesn't.
Ironically, the word ironically is often used incorrectly.
Everyone is overbidding.
I bid $1.
WHO IS of googleiposwami.com
Registrant:
Tim Ogilvie
463 Mass Ave
Apt 4
Boston, Massachusetts 02118
United States
Registered through: GoDaddy.com
Domain Name: GOOGLEIPOSWAMI.COM
Created on: 29-Apr-04
Expires on: 29-Apr-06
Last Updated on: 29-Apr-04
Administrative Contact:
Ogilvie, Tim info@googleiposwami.com
463 Mass Ave
Apt 4
Boston, Massachusetts 02118
United States
9176866816 Fax --
Technical Contact:
Ogilvie, Tim info@googleiposwami.com
463 Mass Ave
Apt 4
Boston, Massachusetts 02118
United States
9176866816 Fax --
Domain servers in listed order:
WSC1.JOMAX.NET
WSC2.JOMAX.NET
I'm giving away free shares in Google to find out
He is so sure he will be able to afford to buy them !!
Im sure there are some instutional investors who are able to more accurately value companies ... but their names are a carefull kept secret I guess. Because the vast majority cant even beat monkeys.
Gee and I though respectable papers were owned by the Moonies!
The RANGE is from 0 to 999.
The range is *NOT* integer valies - remember that stock prices nowadays trade in increments of $0.01. That's 100,000 combinations * 100,000 combinations, or 10,000,000,000 total combinations to win.
Now, it's probably a pretty safe bet that the price will be in the range 0->50, which gets you down to 25,000,000 combinations.
Additionally, you don't need to go through a spam domain, you can just pay $10 for your own domain (if you don't already have one) and use catch-all email forwarding. Use emails guess1-guess25000000@yourdomain.com, have them all forwarded to your email addy, and you're set.
Although I'm sure the guy has put in some rudimentary protections to prevent that kind of guess spamming, and it would also be pretty easy to detect in the event that you guessed correctly, AND were the only person to guess correctly/were selected randomly.
paintball
It doesn't block attachment spam with minimal text content, and it doesn't block spam with extraneous non-text content, or content that's been obscured from plain-text so that the normal "key" words don't exist in the filter's corpus.
I'm already getting 20 spams per day making it into my inbox with a few false-positives a week when a few months ago I got 20 per month in the inbox with virtually no false-positives. The filter is already getting confused.
paintball
I think the price will probably decline up to 10% in the first day.
What I can't decide is if I should bid for a LOT of shares at, say, $1 each, just in case for some reason not enough people bid to take up all the shares, or if I should bid $500 per share, just to make SURE I get some shares, no matter what the price is.
Which is why I think the price will actually decline on the first day of trading - enough people will probably bid a little higher than they think the stock is actually worth just to cover the case where they undervalue it a bit, and people who actually get IPO shares will find a lack of buyers after the stock has been issued.
If this were the SECOND time an IPO had been done by dutch auction, I wouldn't be so sure, but... everyone is a newbie at this.
paintball
all the heart meds you can count with a Cray
Vector machines are great at some things, but counting, a serial process, is not one of them. For counting you're going to want raw clock speed.
paintball
Google has arranged it so that the stock price starts NOT at the market value, but at the speculation price.
This is good for Google, as they get the money instead of the old-boy-network insiders, but probably isn't any better for the average joe who buys shares at the speculative price than it was before.
paintball
Google's share price is garunteed to be overvalued. With all the hype surrounding its IPO the price will quickly skyrocket. Any seasoned investor knows that this is one stock to stay away from until things even out. Sure, they is always that chance for a quick profit for day traders. However, the likes of /. readers likely can't come up with or are willing to contribute enough cash to purchase enough shares to make it worth paying the capital gains. My reccomendation, put your money somewhere else. Invest wisely and with a longterm mindset, not because of the hype surround our favorite search engine. But what do I know? I'm just trying to get my brokerage license...
So it would seem.
I'm going to guess that the auction system does a good job of predicting and that the opening price is near the closing price. I will furthermore guess Open:$90 Close:$100
....
h es/crash es2.asp ... found it with goodl ;-)
Tulip craze:
http://www.investopedia.com/features/cras
Let's say there are a few hundred thousand people willing to spend $200 on one unit of stock?
Not sure if there's a minimum - I gather it might be 100? If so that would put a damper on the people who want a share just for fun.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Look, the whole issue with IPOs in the traditional sense is that NewCo (the company to be listed) goes to a big institutional broker to build a book form them. For this privelige NewCo pays the broker one regular sized bucket load of money. The broker then goes to all their friends (the ones that shift lots of stock for them and pay for all the golfing weekends in spain) and says yould you like to buy a million shares.... They construct a book that is almost always undervalued because other wise they could never get the capital from the investers to build the book in the first place and thus fund NewCo. The stock moves from IPO (Initial Public Offering BTW, how ironic is that!!) to secondary trading and a certain bunch of the book built positions are traded out for a profit (the return on the capital they fronted to buuild the book) as the public buys the stock and the true price is found (note, not value, but price :-).
:-).
Google has short circuited this entire process by offering a dutch (sinlge price) auction which will (hopefully) use a maximal clearing volume algorithm to determine the price at which the maximum volume of stock will clear. The other constratints of this algorithm will determine that at the end of the auction there will be no unsatisfied demand at a price that is better than the one at which the stock traded and as such there will be no immediate price pressure on initial secondary trading. So it should stay around the price at which it opens.
What will that price be? Well thats a good question, but it Google publishes the state of the book over the weeks before the IPO then we can run the MCV algorithm and determine the "if it opened today" price which is usually a very good indicator of the final price as the IPO time approaches (well obviously really
It is really a very interesting approach and on that the intitutional brokers will not really like very much at all. I wish them good luck.
"The first thing to do when you find yourself in a hole is stop digging."
A Dutch IPO (if you will) front ends all of the speculation, combine that with the (still) recent tradition of making boat loads of money off of an Internet IPO; a recipe for disaster. Most people purchasing the stock in the auction will be eager to sell within minutes of open sales.
(Total guesses:) I say it will be capitalized at $25 to $45 billion at the start, and drop to $7 to $15 billion by the end of the day, with a low as little as $2 to $5 billion. The IPO will not bust (as all the shares will sell), but it will scare the pants off of most investors, look for many stocks to suffer.
The leading effect on other tech stocks is hard to gage, part of me says that people will sell of their tech stocks to raise money for purchasing stock, but the other part of me says that tech stocks will rise in anticipation of a new tech boom; either way, its a good idea to play it safe in the market that week.
The grass is only greener, if you don't take care of your own lawn.
Michaels motivation for putting on this "guessing competition" and getting an idea what they may be prepared to pay for google shares, seems less stupid every time I think about it. So he just asks the slashdot community to give him the answers (way in advance) to the question that everyones asking.. How much will each share be worth at the IPO?
With a normal IPO we know that the price will be dictated by the normal forces/been counter/brokers. With this dutch method the forces are the every day punter (or at leaste thats the idea). So the best way to find out what the share price will be (read: what the punter using the dutch method will pay) is to survey a sample.
To me it looks like a creative(read: cheap) way to survey, but what he does with the information is anyones guess, after giving away 10 shares, i guess he'll be looking to make a profit so he's probably going to sell/profit from the info one way or another.
serenity now!
Don't worry, you only have seventy-five more to go. (holds up a card with three wavy lines)
Okay, what's this one?
MALE STUDENT
A couple of wavy lines.
PETER
(who wants to zap him just for fun) Sorry! This isn't your lucky day!
MALE STUDENT
I know. I -
(PETER reaches for the little lever. JENNIFER seems amused, so PETER winks to her. MALE STUDENT stumbles over some words before PETER zaps him.)
Hey! I'm getting a little tired of this!
PETER
You volunteered, didn't you? We're paying you, aren't we?
MALE STUDENT
Yeah, but I didn't know you were giving me electric shocks! What are you trying to prove here anyway?
PETER
I'm studying the effect of negative reinforcement on ESP ability.
MALE STUDENT
The effect?! I'll tell you what the effect is! It's pissing me off!
PETER
Well, then maybe my theory is correct!
Who wants to help me predict the price of a share? (my method is shockingly effective! $5/study! ;-)
"A witty saying proves nothing." ~Voltaire
"d'Oh!" ~Homer
Of course no bids will be accepted unless they cleverly incorporate PI, E, PHI or other magical irrational numbers!