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Google Slashes IPO price
Hungry Student writes "In breaking news, Reuters and the BBC are reporting that Google has reduced the price of its IPO to between $85 and $95 per share from $108 to $135 per share. Google shareholders are also reducing the number of shares available for sale by 6.1m to 5.5m. The total number of shares available is currently 14.1m."
"What effect will the built-in search [searchenginewatch.com] in Microsoft's Longhorn [microsoft.com] have on Google's traffic?"
Agreed. I think we are going to be getting to a point where the majority of the desktop users will stop going to a website to search. They will choose to use integrated solutions in the future. If google can get an app out for the desktop that *integrates* with the desktop, it will be able to battle with the longhorn search feature on it's own playing field.
I'm conflicted about Google going public. On the one hand, it will provide vital data in my nonsanctioned research about how concern for shareholder confidence destroys good companies, while, on the other foot, Google's new concern for shareholder confidence could, well, you know. I think going public causes a company's principle focus to shift from what would be good and profitable for the company to what shareholders think would be good and profitable for shareholders. I believe the two are typically mutually exclusive.
Are IPOs becoming like Hollywood where the take during the first weekend of a new movie is the sole measure of it's success? That means lots of good movies aren't made because they won't top that list and movies that are made are done so to optimize their profitability, not their cinematic quality.
Recipes for geeks -- no meatloaf, we promise.
How about the Google Deskbar?
Very nifty integrated search tool. I loved it (back when I actually used Windows). The only issue here (of course) is that Longhorn will come with the MSN search agent, but people will have to install Google's deskbar app.
coughmonopolycough
The Cheese Stands Alone.
When all of the dirty laundry is aired and skeletons are pulled from the closets, I wonder what Google and their IPO will look like in the eyes of the Slashdot community. So far, they've gotten off relatively light, IMHO.
"Ask not what your country can do for you." --John F. Kennedy
If you really believe this, what are you whinging about? You will make a mint.
_O_
.|< The named which can be named is not the true named
Do you really believe that a company like Google is worth $100+ a share? No offense to Google - I love their search engine and gmail - and it is a profitable company, but really look at their business model and tell me that it's worth tens of billions in market capitalization. If you think so you're out of your mind. Anyone getting in at those level are hoping for a short term increase (right after the IPO) to make some cash. Long term, that price has only one place to go: down.
First list your goods at $99.95, and then (a day later) put a "25% off" on them. Trained American consumer will flock to whatever you sell because it's now "on sale".
Let's experiment.
1) Company A raises $100M through debt-financing, talking a 20year loan at a 5% interest compounded annually. Over the 20 years has an average pre-debt-payment profit of $8M. Given yearly debt-payments of $6M, this leaves $2M/year for the company founder, who then has a net worth at the end of 20 years ~$40M.
2) Company B raises $100M through an IPO, with the founder retaining 20% of shares. Given the same profit, the company is free to give out say $6M in dividends (take off some from taxes). The founder then receives $1.2M for a total of $24M at the end of 20 years.
So it appears you're right then and the IPO way isn't as good....right? But wait, the founder still has stocks initially worth $20M which now puts him out ahead. But, then consider that given a standard P/E ratio of 30 the market capitalization for the company is ~$240M, making the founders stake worth $48M, giving him a total worth of $72M.
Of course there's a whole host of other things that affect things one way or the other. Like personal income taxes. Founder A is paying tax on $40M, while Founder B pays on only $24M, since stocks aren't taxed until you sell of them.