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Google Slashes IPO price

Posted by CmdrTaco on from the welcome-back-to-hype-island dept.

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."

5 of 242 comments (clear)

  1. Impossible Valuation by manmanic · · Score: 5, Interesting
    Who knows whether the new (or old) price is a good one? It's practically impossible to put a number on Google's future profitability. There are simply far too many unknowns:

    • What kind of growth rate will Google see from the Adsense and Adwords advertising networks?
    • How many millions of people will use Gmail once it finally goes live?
    • What effect will the built-in search in Microsoft's Longhorn have on Google's traffic?
    • How much will Google make reselling search to 3rd parties such as Google Alert?

    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.

  2. Correlation? by StevenHenderson · · Score: 5, Interesting

    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?

  3. Why buy? by Phoenix-IT · · Score: 5, Interesting

    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.

  4. Re:Remember Yahoo's IPO by GTRacer · · Score: 5, Interesting
    Ummm, wasn't that the WHOLE POINT of doing it Dutch? To control the price spike and to keep as much money as possible inside Google?

    GTRacer
    - Got totally burned on EuroDisney way back when - but I learned the value of a franc

    --
    Defending IP by destroying access to it? That makes sense, RIAA/MPAA. Go to the corner until you can play nice!
  5. Re:Nice! by The-Bus · · Score: 5, Interesting

    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.