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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.
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In fact, they already provide programmatic access to their results via the Web APIs, spawning services ranging from a recipe generator to a site for detecting online plagiarism. According to this story, the developers of Google Alert, one well-known APIs application, have recently been granted permission to commercialize their service. My guess is that it won't be long before there are many more 3rd party Google applications, bringing in a lot of new money to Google's coffers. Anyone for a BUY rating?
'I'm Feeling Lucky' takes on a whole new meaning.
The government's moral compass is controlled by GPS.
In times of crises, they alter it to suit their needs.
Seeing as Google is everyones darling child now, and they have had much coverage over their cool technologies and decent methods of doing business, it looks to me like a bad buy. In other words, the price can only go down.
IANAstockbroker, and i have no money to buy stock anyway.
Does anyone find it ironic that this story is a Yahoo story?
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.
I am still keeping my fingers crossed that they can remain faithful to their customers
Oh, you mean the people who advertise on google? Yeah, I think they'll do a good job of keeping those people happy. But people who use google's search engine just to find stuff are not customers...they're the product. Google main business is not selling search results, it's selling eyeballs. Just like any other media company (television, radio, etc...) who's job is to sell advertising, google's customers are the people who pay for advertising. When you start paying google to do a search, then you'll be a google customer...until you're the product.
It's Probably Overpriced and it is.
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.
can i use froogle to find a lower stock price?
[n8.r0n] http://petesweb.spymac.net/
I've always been fascinated by people's fixation on the share price when it means absolutely NOTHING in the grand scheme of things.
A stock's value is calculated by the share price times the total number of shares outstanding. Now, Hemos was quick to comment on the share price, but lacks the understanding to figure out just how much cash the company is raising and what the total value of the company will be at these levels.
But who cares?
It really doesn't matter because the average investor doesn't know any better. This is the same reason that stocks go up when the company announces a stock split. The idiots eat these stocks up because they think that there's something magical about owning a stock through the split. "The company gives you more shares", responded an ignorant investor after I queried him on his voracious appetite for buying companies that are ripe for splitting. What he failed to realize is that the price drops proportionally - the value of the company (and each investor's holdings) is the same before and after the split. But nevertheless, owning these companies through the split is often a very profitable method of investing simply because of all the ignorance out there. Never underestimate the power of stupid people in large quantities.
It makes me want to shoot myself in the face.
Life is the leading cause of death in America.
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.
With a PE of 115 Google is an expensive stock & I guarantee Warren Buffet won't be buying at the price. By comparison banking stocks have PEs generally under 20.
Analysts (and I use the term loosely) try to spin these high PEs by claiming there will be high growth, and using Price Earnings Growth (PEG) models.
I won't be buying at that price.
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.