Slashdot Mirror
Google Sets IPO Pricing
It appears that Google has set their IPO price - 108$ - 135$ per share. Yowza. A reminder that this is done through the Dutch Auction ? process, which makes that pricing even more...uh...interesting.
← Back to Stories (view on slashdot.org)
They may also start leveraging the success of popular services that use their Web APIs , such as Google Alert and Copyscape , particularly with the commercialization of Google Alert. Positioning themselves as a general technology platform for the web is surely a step in the right direction to further raising their valuation.
Will be interesting to see how quiet they stay from now till the actual IPO...
Consider 2 businesses of equal value doing IPO. One creates 1000 shares, and sells them for $10 per share. The other creates 100 shares and sells them for $100 per share. Which is the better deal? Duh! it's the same deal (essentially).
In this case, it appears Google is (or thinks it is) selling "large chunks" of the company. They could offer instead 10 times as many shares, for only $13.50 a piece. Maybe this would be smart. It apparently would suck in a large number of Slashdot readers!
And this crowd is supposed to be math-sci literate! How depressing... I think I'll go off and cry about the poor state of the nation's youth now.
and 51% accumulation would mean a hostile takeover.
No. Sergey Brin and Larry Page have Class B shares with 10 votes per share, and they own a third of the company.
This means that, assuming you want to have to get as few Class Bs as possible, you would need to own 100% of the Class A shares, along with 40% of the Class B shares, which are not for sale, I might add.
Good luck on that hostile takeover.
Random and weird software I've written.
Berkshire-Hathaway's A stock was worth just over $88,000 per share this morning. Their B stock is almost $3,000.
LegendMUD
Your last point is correct, companies almost never sell all their shares to the public (some trusts sell all shares in an effort to buy a large asset). Google's founders, employees, and venture capitalists will be holding about 90% of Google's shares. The $2 billion likely uses the $108 price, rounds down, and subtracts the underwriter's fees (usually 6%-7% in Google's case rumored to be 3%-4%). You would have to check the filing but I think Google currently has about 260 million shares outstanding (Pre IPO).
One of the reasons tech companies get tremendous valuations is that they have very limited floats (total number of shares less number of shares off the market in the hands of insiders and other large shareholders). As a result the price is set on only a small portion of the total shares. I'm surprised they don't split 3-1 and bring the per share price out of the stratosphere given their stated focus on idividuals (fund's prefer high share prices, retail investors prefer lower share prices).
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
You're also forgetting that they have outstanding stock that investors and employees hold, which become part of the market cap when the IPO is complete, IIRC.
They plan to open up 24.6M shares at $108-135, but employees and investors also hold stock.
The market cap will be over $36B, with most of this is being the current owners.
PE is 115 as per my other post.