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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."
The initial price per share for Google stocks has been lowered to $85-$95 down from speculative high of $130. This will create a market capital less than $26 billion down from $36 billion. Noted that the confounders, Sergey Brin and Larry Page, disclosed that they intended to sell 1 million shares each but will now sell 480,000 shares in the range of $90 per share valued at about $43 Million. In addition, the pre-ipo market will get 5.5 Million shares, half the originally anticipated. View the Complete prospectus.
Now my kidney I just sold can buy me 50 shares! Yes!
Also, Slashdot's 10 millionth post today! Perhaps in this story even! WOW!
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.
Here we go dot-com boom #2, I'll be getting off now... Perhaps I'll become a nurse, before they outsource it.
Uhhh, is it possible to buy half of a share? That seems to be all that I can afford.
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
So now it's overpriced by a factor, of what, 6? Instead of 10?
Small potatoes make the steak look bigger.
I knew it!
I said here before it would get down to $80 within 4 weeks (once people who got their shares for free sell out) after the IPO and I think that will indeed happen.
It's not only the lame pre-IPO management, it's the fact that they're a single product company and that product (ads) is a commodity.
Their placement technology is probably the best at the moment, but once someone else does that part better and sells it to Yahoo or Microsoft, they head further south...
And for those who are not aware, there exist two classes of voting share, one class that offers 10 votes per share reserved to the founders and CEO, and another which as 1 vote per share, for the rest of us.
g y/2004-05-16-google-nonvoting_x.htm/
See: http://www.usatoday.com/money/industries/technolo
Remember the year 2000? They promised us flying cars. They delivered the PT Cruiser...
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...
Also, Slashdot's 10 millionth post today! Perhaps in this story even! WOW!
Nope it's here!
For those interested, you might want to try Watching Google Like a Hawk. They provide news and analysis of Googles IPO, their services and future plans. A lot of information for anyone looking forward to the IPO.
This is my sig. There are thousands more, but this one is mine.
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.
The SEC has also requested further information about their Playboy interview, which will delay the IPO further.
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.
First I find out that Google is lowering their stock price, then, Mariam Abacha from Nigeria emails me and tells me that I'll only be getting 7% instead of 25% of the 8.5 million I'm going to bank for her. I'm losing cash everywhere!
If they were to want to sell the stock to non-US persons, they would have to go through the registration process (such as it is) in every other country.
If you want to buy shares, set up an account with a US broker, like everyone else does. They will buy it in trust for you. And just so you know, US persons have an extremely difficult time buying shares of foreign companies directly. That's why there are ADRs.
...HAS a built-in search.
:)
XP gives you the option to search the Internet from the same dialog you use to search for files on your computer.
Unless Longhorn adds searches to a prominent toolbar, it shouldn't make any difference. Even if it does, look on the bright side: We can always look forward to another antitrust suit.
tasks(723) drafts(105) languages(484) examples(29106)
This is the inevitable result of Google management using old and busted, Old Economy measures like P/E or EPS to judge when to go with an IPO. Don't they know that Clicks per Million (CPM) or Eyeballs per Million (EPM) are the new hotness?!?
Now if you'll excuse me, I've got to leave for a First Tuesday party; I don't want to settle for just reading about it on SFGirl afterwards.
I heard you only got the reduced rates if you used Froogle.Google.com
This is a dutch auction. Google is not setting the price. The price they mention is simply an estimate of what they expect the final offering price to be.
In the immortal words of ObviousGuy: "I don't get it."
Money for nothing, pix for free
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
But...but...it's so much more fun to get all self-righteous and overreact! Why you got to go ruining the man's parade with FACTS?!
"Gold still represents the ultimate form of payment in the world." - Alan Greenspan, 1999
>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.
here:
t company&CIK=0001288776&owner=include
http://www.sec.gov/cgi-bin/browse-edgar?action=ge
The S files are the interesting ones.
no
Actually, this happens a LOT for US IPOs. Sometimes it is even *required by law*.
http://www.fuckedgoogle.com
seriously funny shit- too bad the original fuckedcompany has absolutely NOTHING about this disaster.
then short the stock as soon as you can. I mean if your so positive. It's easy money, yes?
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Because by the time the shares get to the actual public, they won't be that cheap. The brokerages use the opportunity to get in on a hot IPO as a perk to their other customers. So the rich DO get richer here.
Go review your .BOMB economy history, this is exactly how the netscape IPO went.
-Looking for a job as a materials chemist or multivariat
I'm not sure about the past few years, but I've certainly noticed a deterioration of results in certain areas. As a random example, do a search for a celebrity, chances are that most of the top results will be for shite 'celebrity directories' that do little more than link to eachother and eBay.
Do any of you guys have a clue how shares actually work? That the price, whether its $95 or $.50 is irrelevant when viewed alone. The only relevant thing is the price * number of shares, i.e. the market capitalisation.
Now you can argue whether or not the expected capitalisation of $24 billion is too high or too low. Then you're just saying you know more than the exports that have guessed this figure (and its _not_ set by google - its just an expectation). And since the actually share price will be determined by what the market is prepared to pay, it is by definition the 'right' price.
Further, insiders - as in the people with friends in the right places that are thus guaranteed shares at the IPO - would get rich if the price started too _low_ and then bumped up in the first days to the 'real' market price, not the other way around. By doing a dutch style auction, google is trying to prevent exactly this from happening.
Yes there is actually. Say you have a company that is getting off the ground and you need to raise $50M to build a factory or whatever, then there are three ways to finance the factory:
Sure the guys want to make some money, but they made it explicitly clear that the only reason they are having an IPO is that the SEC was going to enforce public reporting requirements on them anyway. All indications are that they would have been perfectly happy staying private.
That's why they got away with the 10x voting shares for the insiders, and for that matter the Dutch auction.
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.
So at a more conventional PE of 10 or so, Google would only be worth a more conventional $15 or so, at which they would have opened had they opted for the same old ho-hum run-of-the-mill greedy Wall Street IPO machine procedure. The problem for those who are bidding even at the lowered target is that their shares will be in the $10-25 region come January or so, anyway.
Someone needs to take an economics class.
1. Yes, in fact you are debt free. No HAH's about it.
2. (almost) No stockholder is going to purposely devalue stock they own just because you don't obey their whims. They are in this to make money afterall, not to megalomaniacally micromanage comparies.
3. Once that $50M is raised initially the stock could go down to $0, and it wouldn't change a thing.
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.
and