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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.
Uhhh, is it possible to buy half of a share? That seems to be all that I can afford.
So now it's overpriced by a factor, of what, 6? Instead of 10?
Small potatoes make the steak look bigger.
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.
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.
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.
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
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*.
The only way you could be blocked out would be if no broker was willing to act for you.
_O_
.|< The named which can be named is not the true named
You're completely wrong. Avoiding this price spike, and avoiding the "hot IPO as a perk to their other customers", was the whole point of the dutch auction. There will be no price spike, and you or I could go buy some shares right away.
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:
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.