Google IPO Open for Registration

Jon Shoberg writes "Google IPO is open for bid registration. From the front page: 'A registration statement relating to Google's Class A common stock has been filed with the Securities and Exchange Commission but has not yet become effective. Google's Class A common stock may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of Google's Class A common stock in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. No offer to buy shares of Google's Class A common stock can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time until the notice of acceptance is sent after the effective date. Of the shares to be sold in Google's initial public offering of Class A common stock, 14,142,135 shares will be issued and sold by Google and 10,494,524 of the shares will be sold by the selling stockholders.'"

Comments

Rolling in dough

[hrbrmstr]

OK, so 2,4636,659 shares * $135.00USD = $3,325,948,965USD

Is it just me, or are we back in the dot com shenanigans?

Google. 3 *billion* USD. Not worth it (to me at least).

Then again, I'm just a lowly engineer.

Why not more shares and lower price so those of us who *made* Google what it is could have had at least one share?

Sigh.

Re:Rolling in dough

[Anonymous Coward]

Almost got it right -

14 odd million shares offered up by Google *of which* 10.5 million will be offered to the public.

The other part you miss is what percentage of the company these 14 odd million shares represent - this is not *all* of Google on the market but something like 10% of the company.

You need to change that number from 3 billion, to 30 billion.

As to dot-com silliness? Who knows, but better a company that explicitly states that they are gonna try not to be evil than others I suppose.

The founders *will* be billionaires in a short amount of time. That won't suck for them...

Re:Rolling in dough

[hrbrmstr]

Yep. I saw the market cap #'s. What fundamentally amounts to being an advertising placement firm (free search, free e-mail, free news is not a business model) is trying the same boondoggle.

My bet is that the share price drops down to double digits by next year.

boB

Re:Rolling in dough

[ortholattice]

If you are interested in this, remember that the public is getting only a tiny fraction of the 268 million shares outstanding. Several of the officers and directors will each individually own more than the entire public offering combined. See the prospectus. If indeed it fetches around $135 per share, it will create quite a few instant multibillionaires. Now, is this a fair price, or is everyone getting caught up in the hype? I certainly have respect for Google. But if you're thinking of using your money to make these guys obscenely rich, you should at least read the prospectus very, very carefully before making your decision.

Why No Internationals???

[Tr0mBoNe-]

I, being a Canadian, would be interested in buying 1 stock. Just for saying I owe approx. 1/14000000th of half of google. But because I am not a U.S. Person, I am stuck owning a small portion of Nortel stock and a little of Air Canada. (canadians would know why I'm kinda bitter about those)

Yarr.

Re:Prime Stock

[zhenlin]

That's not the only thing, they planned to raise e * 10^9 dollars from this IPO. Bless the geeks at Google, for they may not be there anymore...

here we go again...

[CptTripps]

Ok, cross everything you have two of. This could be REAL good, or REAL bad for the tech sector. I, like many others, lost my ASS on Palm when they IPO'd. I only wish I'd have waited a DAY, instead of buying immediately. My $2,000 got me a whopping 11 shares, that turned into 1.1 shares 6mos later when they had a 1-for-10 split. Now it's worthless...

Lesson learned...

Re:*sigh*

[xmas2003]

I would also suggest that the Dutch Auction works "against" the financial firms bringing firms public.

For "classic" IPO's, the individual investor has a very hard time getting in on the ground floor - i.e. the folks getting most of the offerred shares at the actual IPO prices are the financial firms handling the offering ... and their best buddies/clients - think Frank Quattrone.

So THEY are able to "flip" the shares first day and make a buncha money ... whereas the individual investor typically can't get in until after the POP, when most of the movement is done ... and as noted, the company only gets proceeds at the opening price, not the POP price ... so it is in the financial firm's interest to price as low as possible.

This is why the offering firms aren't too keen about a Dutch Auction ... and it takes someone like Google (who has broad interest) to pull it off. It does seem like they will get one heck of a premium for their stock - note that as often incorrectly noted, it is not the share price that really matters, but the company valuation - i.e. how many shares of stock (total, not offerred) times the share price that is significant - in this case, the number is on the order of 30+ billion dollars - lotta money for a search engine, even a darn good one!

Re:*sigh*

[JJahn]

Correct, this IPO is for people in for the long-haul. If you're looking to get in fast and get out even faster and make some money, Google is not for you. Its not for me either, but thats just because I try to stay away from IPOs (especially tech IPOs) no matter how cool they sound.

Re:*sigh*

[dhovis]

Actually, the Dutch auction works in favor of the small investor AND Google.

In traditional IPOs, the company sells itself to several investment banks at a value below the expected fair market value. These banks sell those shares to their best customers. Sometimes they even give out shares with the stipulation that the investor that received those shares must buy more shares at market price when the stock goes public (an illegal practice that drives up share prices). Once the stock goes public, the share price usually rockets (because it is undervalued) and the investment banks are free to sell their stock and pocket the difference. The company issuing the stock gets none of this money, even though it is part of the "perceived value" of the company at the point of the IPO. This system really benefits the investment banks and their big investors, to the detriment of the company issuing the IPO and small investors.

Small investors usually can only buy the stock when trading goes public. Most small investors are lucky to get in the first day, and by then, the price has skyrocketed. With the Dutch auction, every investor is on equal footing. If you are willing to buy 10 shares at $100, you will win out over somebody willing to buy 100,000 shares at $90. Everybody who gets the stock will buy it at the lowest price at which all share will sell, so if you bid $135 and the final price is $103, you will get the shares you bid for at $103, the same as everyone else.

FWIW, the estimated market cap for Google, based on those share prices, is more than McDonalds, but roughly the level of Yahoo. Is Google worth as much as Yahoo? That is for you to decide. If you think that those prices overvalue Google, don't buy. If you think Google is going to grow to be a $30 billion company in the next decade, then it is a very good investment. You decide...there are always risks in buying stocks.

Re:*sigh*

[TopShelf]

Well written. Another point to note is that since the IPO price is the lowest that sells the total number of offered shares, by definition you have a number of players in the market who would have gladly payed more than the IPO price for Google's stock. So there's very good reason to expect upward trading on IPO day...

clsses of shares

[Sivaram_Velauthapill]

Google issuing multiple types of shares is very lame. I'm neither interested in buying the company nor do I have the money, but having common shares with very little voting power, while having another voting class that is held by the insiders is old school. It's very unusual in the tech industry and it is very elitist.

Re:U.S. Person

[Anonymous Coward]

Thanks to google, I finally know what a U.S. Person is!

This IPO is interesting. Even though I am not a US person (or resident) I own shares that are listed on the NYSE and Nasdaq - I purchased them through a stock broker in my country.

Is there any way for non-Americans to participate in the IPO? While I am not a lawyer, the google requirements sound like non-Americans are excluded.

Re:*sigh*

[Anonymous Coward]

Well written. Another point to note is that since the IPO price is the lowest that sells the total number of offered shares, by definition you have a number of players in the market who would have gladly payed more than the IPO price for Google's stock. So there's very good reason to expect upward trading on IPO day...

Except that those people already got all of the shares they wanted.

For instance, somebody bids $150 for 1000 shares. Say the final bid price that all shares sell at is $110. That investor gets 1000 shares at $110. So they have no incentive to buy more shares above $110, they already got all of the shares they wanted.

Also, they're not limited to just one bid. So they could have bid $150 for 1000 and $100 for 1000. So with a price of $110, they get the first 1000. If the final price was below $100, they would get 2000 for the lower price. Either way, there is no reason for them to want more shares at a price higher than the final bid, since it would be better to just make the bid than change your mind on the first day.

Re:*sigh*

[Scarblac]

If you think Google is going to grow to be a $30 billion company in the next decade, then it is a very good investment.

Now it's not. For it to be worth $30 billion at the moment, it should be worth $30 billion now. If it grows to that size in ten years, you have a profit of 0% over ten years, which is miserable.