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Public Markets For Predicting Google's Market Cap
k2enemy writes "The Iowa Electronic Markets have created two markets where traders may buy and sell contracts based on beliefs of Google's market cap at the end of the first day of public trading. The first market, GOOGLE_LIN, trades contracts with liquidation values linearly dependent on the market cap. The second, GOOGLE_WTA, trades six unique and exhaustive contracts in a winner-takes-all market. The markets are currently suggesting a market cap around $30-35 billion. The IEM is also popular for its political markets, which have been very successful (more accurate than polls) at predicting political elections."
Plus, another site that wasn't mentioned, Innovation Futures, offers prizes for successful traders. They are currently running some markets related to Google, and a couple months back, I won a Tablet PC in another contest run there...
Stop by my site where I write about ERP systems & more
In early June, Bush enjoyed a commanding lead over Kerry. Since then, Bush's shares have dipped 7 percent, from 55 cents to 51 cents on Tuesday afternoon. Over the same period, Kerry's shares have appreciated 7 percent, from 45.5 cents to 49 cents.
So who has the controlling shares for each candidate?
The minimum shares is 5, not 500, so a small investor with a little more than $500 can get in on the IPO.
The minimum is 5, ass-hat.
That said, it still isn't for the small investor, IPOs seldom are.
Link to info
Too busy staying alive... ~ R.A.
If they wanted to help the small investor they would not make you buy a minimum of 500 shares at 100+ a pop through their auction method.
They would go belly up if they didn't do this. This is standard procedure when it comes to an IPO. This is the very reason that Disney stopped allowing tourists to buy a single share of Disney stock while visiting one of the parks. The overhead involved in dealing with this trivial investor was more than it was worth to the investor.
What I am getting at is that the underwriters, who normally get 6-10 percent of the offering for next to NOTHING, have been limited to just 3 percent for the first time ever. This gets rid of the "overhang" that follows an IPO. Take Netgear NASDAQ:NTGR for example. The IPO was priced at $14, which was on the cheap side so that the underwriter, Lehman Brothers, could sell off a couple million shares after the fact, making money for (almost) nothing and pressuring the stock into a downward spiral (Netgear recently beat earnings expectations and guided the next quarter much higher only to see their stock jump and then quickly get pushed downward again).
Capitalist is not evil. I've made significant money in the market this year. If you think that a minimum $50k investment to get in on google is not helping the small investor, then you must be high. That is chump change to 95 percent of the small investors out there.
Life is the leading cause of death in America.
This is what I meant
Whether there is a technical definition that gambling has to be a zero-sum game or not, the ordinary usage is still valid.
To have a right to do a thing is not at all the same as to be right in doing it
They're not rigged, they just don't work like everyone thinks they do.
Originally, slot machines had spinning reels with pictures painted on the outside. A winner was determined by whether or not the pictures on the reels lined up (obviously there were internal mechanics to all of it, but that's how they were designed). Pulls were random based upon when the lever was released after the pull. As such, the player had some amount of influence over where the reels stopped, but there was clearly no way to control this influence and so the game was purely luck--no skill involved. The odds were determined by how the reels stop and where.
Later, as electronic slots were developed, things changed. Rather than the player having any influence whatsoever on the slots, a computer chip determined whether the next pull would be a winner before the money was even put into the machine. The reels were then controlled by the computer chip inside the machine, so they showed matching symbols when the machine decided it was a winner, rather than the winner being determined by where the reels stopped. It's a subtle but distinct difference. So now the chip determines randomly whether there's a win. You could emulate this system to an extent, but I'm not sure anyone ever bothered.
Move on to completely computerized machines. Even the reels now are just pictures on a screen, and you can emulate the entire system rather easily. The chip determines whether or not you win (again, before you even put your money in) and then it displays pictures showing you an outcome that matches the predetermined outcome. Statistically, this is no different than the original reels. Logistically, the odds can be changed by the owner, but many places where there is legal gambling require a certain payoff, so it's unlikely that the odds would be lower than the minimum. But a side effect of all of this is precisely what you linked to--in emulation when you can reset the computer to a previous state and pick a different input, the computer necessarily must adjust the displayed output to match the predetermined outcome. It's still random, it's almost certainly legit (with regards to the posted odds), but it LOOKS like cheating if you don't know how the internals work. If the people who had written that webpage had bothered to find the "you will win the next pull" variable, they probably would have found that saving state then, then going back and choosing a different option still would have led to a win.
Not that they should. Nothing is known about the direction the stock will take post-IPO. It could easily drop 25-50% in the first few days. The market for technical issues is negative right now.
There are different approaches to timing entry into a stock. Technical analysis assumes that all information about a stock is factored into the price. Indicators based on prior price history are used to determine trend. Proponents of the method say the price movement is a manifestation of crowd behavior.
Fundamental analysts study the companies financials, such as trends in earnings, price to sales ratio, profit margin, return on equity, etc.
Another approach is to find companies that are likely to profit from long term major trends in technology and/or society.
As for the Google IPO, there is no stock history on which to base a technical analysis. One might argue whether the fundamentals make the investment worthwhile, and the third approach takes a very long term view, so there is no good reason to jump on board immediately.
Lastly, if you are considering buying this IPO in speculation of it going up significantly in the next few days, have the mental fortitude to set a stop loss below your entry point and get the hell out if it drops to that point, or you stand to lose a lot of money, fast. This is no market for amateurs.
Ask me about my vow of silence!
MIT Technology Review's futures trading marketplace, Innovation Futures, has a comparable Google IPO Watch, predicting when Google will go public, what its market cap will be, and how that will compare to Yahoo!'s market cap. Traders on Innovation Futures are also predicting a cap of $30-35B, but it is by no means a majority. A significant number are still holding on to $25-30B. The site also has a number of other markets dealing with VC and IPOs, Economy and Growth, and trends in technology
Ladbroke's sportsbook. (I always hit this one and ignore the Gallup/Roper bullcrap!)
JMR
Try e-gold - (contact me). I'm NOT e-