Why Wall Street Wants Google to Fail

Sam writes "The most anticipated initial public offering in years threatens to derail a cherished gravy train, where underpriced shares are handed out to favored investors and grateful CEOs."

Comments

Little guy still has little shot

[Anonymous Coward]

As much as the media hype surrounding this offering has tried to present the image that the little guy can take part it simply is not true.

Most of the brokerages that will be offering this to the "public" still require substanital assets in the account, most with a 100,000 dollar min.

Re:No Purpose?

[Nexum]

Second, why are they demanding share prices in the $100 range when Ebay/Yahoo (company's with more value) are priced significantly less than that?

As a day trader, I'm sure you know that the price of the individual share has no individual impact on the total value of the company at all.

Re:gravy train?

[An Onerous Coward]

The original article explains exactly why market analysts are trash-talking Google and the upcoming IPO: They don't want the Dutch auction system to cut them out of the picture.

Your claim that Linus made millions using precisely this system is incorrect. Yes, Linus was allowed to buy stock at bargain basement prices, and he earned a ton when the various Linux companies IPO'ed. The difference is, Linus was closer to an employee than to a traditional investor.

Here's the way I understand the situation, and please correct me if I'm wrong: When a company says, "We're expecting to go public at $5 a share, but we'll let Guybrush Threepwood buy a thousand of them at $1 a share," then the company is agreeing to give up $4000 of the money they could have received from the IPO. But when a stock brokerage says, "We're expecting this IPO to be worth $5/share, but we'll tell them to offer the shares for $4 so our investors will love us," they're taking 20% of the money that should have been obtained from IPO and putting it directly into investors' pockets. That's underhanded, and maybe even technically illegal. But it's what brokers do to keep their investors coming back for more.