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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."
Future successes in any of these businesses could make Google's current price seriously undervalued. And if some key ones fall through, it will have been far too high.
I was hoping Google would come off their high horse. They aren't Microsoft, in fact, I don't even think Microsoft stock is running that high (no I didn't check, and no I am not checking). Don't get me wrong, I'd love to own some Google, however, I wasn't paying that much for it.
From the article:
"The company may face fines if the SEC finds that the share issue was contrary to stock market regulations."
How much is this tied to the decrease in price? Also, did the interview with Playboy have the negative effect analysts anticipated?
At this hour, nobody really knows how much Google as a whole is worth. That's the whole point of this Dutch Auction system that hasn't quite finished being played out yet.
Once Google's on the market, we'll be able to multiply the share price by shares outstanding to get a "market cap" number that'll be an approximation of Google's total value... but clearly an indicator that'll be bouncing that fast can't tell us too much info perfectly either.
Sure, we'd all want this to be simple, but nothing ever is on Wall Street.
I believe it is definitely not a reflection on Google's attitude towards non U.S. persons. It is most likely some requirement for IPOs for stocks trading on the Nasdaq.
As for me, I don't have gmail, and I think vivisimo will be attractive in about 2 to 3 years. Yahoo and MSN will be biggest challengers to google in the coming years.
S
Rather than buy shares, i've placed two bets on it: Opening price below $110, and close UP on 1st day. If the price is down because the institutions aren't buying into an auction that deprives them of big fees - as the conspiracy theory says - then the price should move up as they start buying in at the lower price...
Now look where it's stock is sitting. So basically GOOGLE is way over priced. People who think they will GET IN ON THE GROUND FLOOR of a big bucket of money, are just plain wrong.
I think it's pretty pointless to buy Google stock anyway... It's not like you're getting in on the ground floor of a penny-stock IPO. It it was a small company selling out stocks to get investment capital it would be different. With companys like Yahoo and Cisco no one knew how big they were going to become. So when they did make it big, the stock you bought for a penny ended up being worth hundreds. Google is already big, so the only instant millionares to come of this will be the people who work there.
My question is why is there even this much intersest in google stock. Sure, they are undeniably the best search engine around. Also, they had made millions upon millions in their ads. Also, techies love them because of their 'do no harm' policy. The problem with google is that they absolutely dominate their market, searching with ad revenue. In searching pretty much all they can go is down. Has google tried much else that can't be tied directly to their search portal? Not that I am aware of. Does this sound like a mini Microsoft. Similar to how Microsoft dominates the desktop OS and Office sweet market and have never done outstandingly well in any other market. Soooo, I just don't see where google has another explosive growth and revenue making idea/direction in them. Will google try to leverage there dominance in such a way that Microsoft does and have people hate them for it? Will other compinies leverage their dominance in other areas to topple google?
Nuttles
Saved by Grace
Side Note: from the initial search engine that Microsoft has released, they aren't even in the same ballpark as Google in relevancy. But, microsoft being Microsoft...who knows?
I'm just waiting for the inevitable showdown between the "Do No Evil" motto and "responsibility to shareholders" battle that will eventually play out.
There will be a point where these two will collide, and it'll be interesting to see the result.
All this means is that the FUD campaign worked. All those whiners writing for Forbes and the WSJ got their way - they can get into the company for less than it is really worth so that they can turn around and sell at a tidy profit in only a few days. This is the way that all IPOs are - the rich get richer. Shame on google for trying to change that...
10:1 odds that the shares trade back to where they were supposed (UP!) to be after they are public.
Life is the leading cause of death in America.
>And since google doesn't want non-US-persons to invest in them
Considering that the stock is/will be overpriced, you get no voting rights and the company has done some pretty serious mistakes in this IPO, perhaps Google is doing you a favour.
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
Methinks the major asset Google has at this point in time is its brand. Think Apple through all those years they made shithouse hardware (pre OS X) - it was hard to find anyone who had an opinion who wasn't swept into the starry-eyed Mac enthusiasm for what was, at that time, inferior hardware and software with a higher price tag (than Wintel)** Apple failed to disappear because marketing (and initially leagues-ahead technology) left such an impression ("mindshare" if you like) that they effectively rode off that for years. Google seems to incite a similar loyalty and feeling of 'cool' among it's users. Perhaps that's something that can save them when they go up against MS properly, and they rely on people to actively install / use alternatives to MSN or LongHornBar ...
** Disclaimer - they seem to be back on the horse now, and I quite like OS X and G5s
---- death to all fanatics
Well, now we might be splitting technical hairs. By adjusting a previously flawed calculation of mine, we know the PE is somewhere in the range of 100+, but now Google has a 25% discount (roughly) with the new price goals, which brings it to about 70.
Most people can tell you that at that point, the shares are certainly overvalued. If prices still sell at that level, people are buying. That doesn't mean it's overpriced to the market.
I could buy a can of RC Cola for $50. That might be fine to me (I'm independently wealthy* and very thirsty), but most people won't pay more than $0.50-1.00 for it.
Psst. Here it gets non-technical.
That being said, I have made serious considerations into purchasing Google stock, just so I can start calling it "My Search Engine". As of today, it said it is searching 4,285,199,774 web pages. If Google's shares total about 264 million, that means each share gets to search for a 17 webpages. If I get 5 shares (or whatever the minimum is), I have "search ownership" of 85 pages, and growing! You can bet if I win** some shares I'm going to start staking my claim, and you should too!
Example: This webpage searched by Google thanks to R. Johnathan Prescott.
Then I know that if people search for sweaty men on Google, someone might click-through to their ad. That means I get $0.0000000002! With my 85 pages that I own, I will stake an ad campaign in mainland China. If everyone sees it (1.3 billion people! or 2.59999 bn eyeballs!***), and everyone clicks through, I'll demand payment for that myself, and get...
$0.26 richer!
Then I will go the grocery store, buy a $0.25 piece of candy, and strangle myself with the bag it came in.
Why do I want to buy Google?
________________
* Sadly, no.
** Best to think of it as buying lottery tickets, your outcome will probably be similar.
*** Discount sinister Chinese bond villains with eye patches and others.
Small potatoes make the steak look bigger.
The most expensive way to finance is by IPOing. When you IPO you're giving away ownership in the company, which if your company is successful will cost you many times over what interest would have cost you. You would also not want to run a company completely debt free. With interest rates so low it makes sense to use someone elses money to help you grow (if you needed money to grow) because of leverage.
Now, it has been stated that Google doesn't need the money and doesn't have any plans on how to use the money from the IPO. The only reason they are IPOing is so that the owners and angel investors can cash out. Personally that would scare me away as an investor. If insiders in the company are just looking to cash out, then their actions are telling me what they think about the future of the company.