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Google IPO Problems Surface
manavendra writes "The BBC is reporting that Google has admitted it may have breached stock market laws in the US, while CNET says Google may have run afoul of securities laws when it doled out millions of shares to employees and consultants over the past three years, according to a document filed Wednesday with the Securities and Exchange Commission."
For all the brilliance of the Google tech guys, it seems their accountants are pretty overwhelmed. I've heard some criticism of the way the IPO was being handled by some financial folk, but I wrote it off to the Old Guard fearing that which they did not understand. Now it seems that Google really does have problems with their bookkeepers. Its too bad. 8(
Moo.
Hey, the amount of stock that wasn't reported properly looks like it's roughly the same as the amount being offered for it's IPO... but who's counting?
It's sure as hell not a good way to build investor trust - and it makes it harder to justify the overvalued IPO price.
It could end up costing the employees their "expected" profits from the IPO mania though.
In Soviet Russia, I ruled you
Either you sell them back or get stuck holding toilet paper. There will be a period during which those shares are beign bought back, and after that those shares won't be valid. It probabbly will be automatic as well so you won't have to worry about missing out.
There's an unsubstantiated but strong and almost-believable rumor floating around the valley right now that Google doesn't really want to do that well in their IPO because they'll lose a lot of their key employees who are fully vested.
Also, this is beginning to sound eerily like AltaVista. All they need now is a competitor with better technology and that's pretty much it for them.
So, if everybody already believe it is overpriced, why the fsck would anyone buy any stock?
A buy-back of 23.2 million shares and 5.6 million options ARE only worth $25.9m?
Sounds like 'Pennies' stock to me.
You've never seen a googlewatch post? I can't count the number of times I've reminded someone that the guy who runs google-watch.com has a major conflict of interest, and serious reasons to have a grudge against 'em.
Everyone knows that UIDs that low means the person was a sellout. When UIDs were first introduced most people held out demanding the return of the optional forgable name field. Some of us never did register.
The way recission offers work is: (i) company has done something technically wrong in offering securities, (ii) company offers to remedy this by buying back shares at or above selling price and (iii) persons who refuse buy out offer are legally deemed to waive their right to sue based on the original wrong. Since the recission offer price, though above the original offer price, is below the proposed IPO price, no one will accept. Therefore, this should result is basically no loss to Google.
Google, because it is one of the few big post dot-bomb tech IPOs, was able to compel Wall Street into accepting an auction process that will net the underwriters about 2% of the offering proceeds, versus the almost universal 6 to 7%. Because of this, Wall Street hates Google and investment banks have been feeding the media a constant stream of FUD against the Google offering (which the media, getting advertizing dollars from investment banks, is eager to accept).
Bottom line: (i) Recission offer no threat to Google. (ii) Don't look for the business media to say anything good about the Google offering.
Extraordinary popular delusions
Who was it who said that Google's success is not due to them being so good -- it's that Google's competitors are so bad? What is needed to make the web a better place is some serious competition for Google, and some serious journalism regarding Google. The second part is starting to appear, now how about the first?