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Google Goes Public at $85/share
adpowers writes "It is official. Google will have its IPO debut at $85 per share. To quote the article, 'At that price, the low end of its recently revised range, Google raised $1.67 billion, with $1.2 billion to go to the No. 1 Internet search engine and $473 million to Google executives and investors selling their shares.' Trading begins Thursday, August 19th." Got Google?
I am exchanging every single share of SCO I own for Google. In your face, Darl!
I for one, welcome our new non-income-generating, but VC-attracting overlords. Where do I get my Aero chair?
I want to delete my account but Slashdot doesn't allow it.
I remember Cisco used to be about 85$....
How long before these hit ebay?
... how many google employees have become instant millionaires?
-- Bryan
So anticlimactic. I am actually disinfranchised by the whole ordeal. At least the price came down a bit from the overinflated suggested ipo.
I mod down so you can mod up. Your welcome.
Google is valued at around $23B. Even though it is lower than recent estimates, it is still much higher than people were originally speculating: $10-15B.
Does that mean the search results will start to suck beacause the engine gets fat and lazy, sitting around all day smoking pot. I know I would if I had 1.2 billion dollars. Maybe they should put the engine on an allowance to keep it honest.
I, for one, would be lost without it. However, I will be interested to see how it develops now it's under external influences.
Prosperity is only an instrument to be used, not a deity to be worshipped. Calvin Coolidge
At any rate, now I can get my one share framed! I like to keep all my favorite tech company's stock certificates on my computer lab wall. :)
Anyone else see the irony of linking to the Google index from finance.yahoo.com ?
No? Just me.
Sometimes the media overanalyzes. If you read last night's article in the New York Times, barely anyone mentions that the simple reason the expected share price dropped is that: people did not understand/were confused by the auction process.
I think that's about it. Nothing very complicated at all...
You have to admit it's funny, and related to a big event.
... you have to feel sorry for the employees of Google, if they take their share options now they have to choose - the flash cars _or_ the holiday home in Aspen, not both...
:-]
It must be so demoralising for them
Jaj
In no way bitter.....
Are we sure these aren't beta shares like gmail? Anyone have a stock invite to share?
Recipes for geeks -- no meatloaf, we promise.
Although to some pundits the lower price signals a weaker offering, some of this could be to GOOGs benefit.
The lower per share value was followed by a lowering of shares available. This could generate more interest in the shares, which will drive prices up (or keep them constant longer).
It does, however, mean the cap has gone down by over 25% (36B to 26B). Still bigger than my bank account, though.
The Economist has a good article giving analysis of the IPO.
why you are feeling disappointed and disenfranchised. Could you explain a bit more please?
"I'm just here to regulate funkiness."
I fear that for Google, going fully profit and opening to investors might in the long run have a negative impact... Will big Google shareholders be able to influence what appears in the Search Engine? Maybe right now this will be impossible, but who knows what might happen in the future... And what will be the consequences of it for the users?
Maybe the problem is the following: there is a way in which Google is perceived now that is fundamentally wrong. It is treated as a "service" for Internet Users, the One and Only Search Engine, while it is just Yet Another Company.
Monopolies (especially privately-owned and profit-making ones) are never good. Will Google become as Bad(TM) as Microsoft?
With an already profitable business, and lots of extra money in its pocket, can we expect Google to start a buyout spree? Some targets might include Vivisimo with their clustering technology, Girafa for visualizing search, or even some of the better Web APIs applications like Google Alert or the GoogleBrowser, as this Wired story suggests.
After all, the company offers only one basic product (albeit in a couple of incarnations).
Microsoft are starting to consider Google as competition. And competing with Microsoft has historically been a bad move - I can see Longhorn's search facilities integrating with MSN search such that the boundary between the Internet and the PC on your desk becoming blurred. Google are pretty much at the top, and it'll be almost impossible to maintain that long-term.
So you probably wouldn't buy this share for growth. How about income? Has Google publicised what it plans on offering in dividends? Even if it did, with no past record to go on, how can you have any idea what level of income to expect?
Even if you don't buy the share for growth, it's still an expensive share. It wouldn't take much for its value (and thus the value of the investment) to plummet.
Ultimately, I think this share is a bet that the rich might be prepared (and financially able) to take, but most would be well advised to steer clear of. The dot-com bubble burst a long time ago.
Why not use the google stock tool to google's Stock...
If the only reason the price went down was confusion, then today when the stock is listed and can be bought by "normal" means, then it will shoot right up to $135, right?
At least, that's what I'd do with that kind of money. That and loose women.
Way overpriced. What's the traditional rule again? 20 to 30 times the annual profit (after taxes)? How are they ever going to reach, let alone sustain a 1 billion dollar profit per year?
someone gets +3 informative for telling us what day it is.
But they're ripping people off on Froogle, which still lists the shares at $108-135!.
Small potatoes make the steak look bigger.
Perhaps that's what YOU believe because that's what Google wants you to believe? I think it's because Google knew that their stock was overrated and was going to cause major financial headaches for when the stock prices plummeted from their overinflated original offerings...
First, pick up and read a copy of The Intelligent Investor by Benjamin Graham (commentary by Jason Zweig).
1) By all fundamental measures, this stock is dramatically overpriced. (Ask yourself how a search engine -- which could likely be replaced by next years' "next new thing" -- could be worth, on a per cap market basis, as much as McDonalds.)
2) IPOs usually only make one group of people rich: the boardroom execs. Don't be suckered by the initial rise in price -- IPOs are almost always followed by a dramatic downturn.
I don't understand WHY Google IPO'ed. It's not exactly they needed the money. Well, at least it's not like Yahoo, which went from .42 cents a share to $42.00 a share overnight for doing NOTHING. Google is at least useful and will remain top of the search engine heap for at least a couple of years. There is always someone else who comes along that's better. Remember when HOTBOT was the hottest thing since sliced bread?
"Jeremy, you need to get to an internet cafe and cut and paste some appropriate sentiments about me from the world wide
I agree with the guy in the article who said they should have offered a much larger number of shares at a much lower price. Joe Blow is a lot more likely to throw some "play money" into Google if his say, $1000 buys him 40 or so shares rather than 12.
"The problem with internet quotations is that many are not genuine" -Abraham Lincoln
It works in their favour, really. They reduced the number of shares and the price lowered. If anything this will be a good buy with solid growth. They went from being a solid investment to a hot ticket, so now news articles will demonstrate the stock going up up up in the next while. Rather than reports of the stock holding at $110 or something.
:-)
Once again, Google is flexing their mental might.
The dangers of knowledge trigger emotional distress in human beings.
I like this..
Google wasn't original but it did search significantly better. Created interesing products that worked well. Now the payoff.
They deserve it.
Where do I get my Aero chair?
This was the stock auction. The bankruptcy auction isn't for another few months, at least.
Weren't you alive five years ago? =)
NASDAQ is reporting that Google shares will begin trading sometime between 10 AM and 12 PM EDT. IMO look for an opening between 10 and 10:30 AM EDT.
mod me down, goggle fanboys, but I'm not buying into the hype. I haven't heard anything about how they're going to turn a big bundle of cash into an even bigger bundle for a return on my investment, other than piss it away one advertising experiments. It's basically Internet data-mining of public information anyway.
Give me a good solid energy or pharmaceutical company or something with a steep demand curve, naturally limited supply and customers who gotta have it (like sickly suv owners).
try { do() || do_not(); } catch (JediException err) { yoda(err); }
I keep hearing a partial lyric from a song that goes like this
Take the money and run. Google is too risky anyway. A search engine that doesn't offer anything new.
"people did not understand/were confused by the auction process"
Those people have no business playing in the market, then. Auction theory is in second semester economics here at UMD@CP, including the exact variant that Google is using.
Anyone who gets in at $85 is going to get burned once rational valuation kicks in. We should be thankful it went lower. I've read that most institutional investors are staying far, far away from this one - that's pretty telling, in my eyes.
Geek cred != market cred.
-Erwos
Plausible conjecture should not be misrepresented as proof positive.
I noticed the link in the article to Yahoo's financial site, but none of my regular sites are showing GOOG yet. I can't add the symbol to the AIM stock ticker, and it can't get it from washingtonpost.com yet either. How long does something like this take?
But, as any idiot knows (I know, I am an idiot...) the value of anything is marginal. House prices are only high so long as there is a shortage. If everybody suddenly panics and wants to sell, houses get cheap very quickly. This is economics 101.
So, basically, I do not see how a share can be fairly priced unless the majority of the shares are put up for sale. Can someone explain to me, without being ruder than necessary, why the SEC allows this practice?
Panurge has posted for the last time. Thanks for the positive moderations.
Well Google going IPO is bound to create a heap o cash (tm) one way or another but it would seem they have simultaneously shot themselves in the foot repeatedly and torpedoed net-based ipos for other companies no? I'm basing my comment on slashdot news which is a funny feeling I have to admit, but would they not have been very likely to earn more if they did it the old fashioned way?
:)
I suppose Google employees are also able to buy Google shares on the market and ride them up, but mostly I'm curious about what they are going to do with the cash now.
It would be interesting if they purchased some patents and GPL'd them.. though I guess they are mainly going to try to be everything to everyone everywhere that you need to search for information. Too much even for Google I'm afraid. I guess if it had gone well they could have helped other companies get IPOs for discount rates.
Wish them luck though. Well now off to read the Economist but posting first so no real facts will sully my knee-jerk reaction!
The way that Google offered its shares, through a Dutch auction, guarantees that the price will go down. The way a traditional IPO is done is that the underwriters buy all the shares. Then they feel out the demand and sell the initial shares at a somewhat lower price to select investors. As soon as it starts trading, these lucky people flip the shares for an easy profit as the pent-up wider demand for the shares is met in the stock market. Using the auction process, they opened the bidding to the public at large and therefore anyone interested in really owning the stock would have already placed their bid. The demand is met by the IPO, not by the trading after the IPO in the aftermarket.
Assuming you have been given a million dollars worth of options but you can't exercise your options for 2 years. What do you do, wait around till the stock's in the toilet and you're penniless? Hell no! That's the time to preserve your captital by hedging your position. Buy put options or get creative with another derivative contract that will protect your interests. The thing that amazes me the most about the dotcom bust is how people just sat by and let their riches turn to dust.
Ask me about my vow of silence!
"It would be interesting if they purchased some patents and GPL'd them.. "
:)
Interesting yes. In complete breach of their fiduciary duty to their stockholders? Sure. Realistic? Of course not...
Now that they are publicly traded, they will do whatever it takes to keep their stockholders happy, and to make the numbers $THIS_QUARTER.
Don't you think? That they link to their biggest competitor Yahoo for the Google stock quote?
http://tinyurl.com/4ny52
As for 100MB being enough, I'm sure it is for now, but I've hit 10MB in 3 weeks, and that's just with text. The "filter," conversation and search features work so wonderfully, that I've found myself subsribing to mailing lists (which I would have never done through my ISP email account). All mail from mailing lists is automatically routed to an appropriate category, and searchable whenever I want, and with 1000MB I can be pretty sure it'll be there for quite some time.
What with all those investors clicking away on any google ads that appear, gotta keep revenues up!
Think about it, you now own part of a search company who's money comes from clicked adverts. Regardless of interest wouldn't you click on the ads to ensure constant revenue???
The discount over the original predicted price of $105-135 is larger than what the $85 price suggest. The original plan was to offer twice as many shares in a dutch auction. In this type of auction the price is bid down instead of up until the entire lot of shares is sold.
If the original amount of shares had been offered to the public, bidding would have continued well down past $85 to a range of $50-65 per share or so. In other words, for all practical purposes Google went public at half the price they had predicted. Interestingly, at that price Google's valuation is more in line with its competitors (overture, yahoo).
Keep in mind that most companies that go public aim for a $10-20 per share initial price. This suggests that when the Google IPO process got started, Google was expecting to get a lot less per share than they got, so in the end they should be more than happy.
Wow, I didn't know that Ricky Williams posted on /.!
Stop by my site where I write about ERP systems & more
I can't understand where all the rampant Google bashing is coming from. I bet you 90% of the slashdot readers use google on a daily basis, and how many of you have kickass gmail accounts? So Google is able to provide these wonderful services for free and still make a profit, and that's pre-ipo. Now they've got this influx of cash - what do you think they're going to do? I bet you anything they're going to ramp up their hiring and recruit some more of the best and brightest.
Secondly, can any of you please read between the lines of whatever investment magazine you all seem to be reading? Do you really think those investment magazines are happy at all with the way Google has done their IPO? Doubtful, and there's a very obvious reason for it: Money. So now the bigwigs who would normally be getting shares at $10 and turning them over at the end of the day for $60 aren't getting their massive returns on investment. By doing the IPO with the dutch auction style, they've cut out all the middle men who reap the rewards of the IPO and leave the company in the dust. Now they've got a stock that is more stable, less volatile and attractive to long term investors which is exactly what they want, because in the long term, Google stock owners win.
You see, the whole thing about the network computer which was hyped a couple years ago but never went anywhere, well that's the future. The OS won't matter anymore because when all of your files are online in the GoogleBase, accessible anywhere and triple backed up, will it matter what OS your computer is running? When you can rent out processing time on the GoogleOS to run hardcore programs? To store mass quantities of pictures, movies, everything with certainty?
Ultimately, Google will take over everything or it will become nothing. It's a gamble, but I always bet on Google.
Polluting the Internet since 2003...
http://percep
$49 bid, $137 ask
Flourescent (adj): smelling like ground wheat.
I'm sorry, but the hoopla surrounding the IPO of a freakin' search engine is sad. $85/share? Please. Yeah, it makes some money. But not enough to justify billions in paper worth. No matter what happens, people just can't seem to let go of the fact that the internet bubble burst and the glory days of $200/share for internet companies is GONE. This isn't 1998. People, it's GONE.
So, unfortunately, I have no money to play with. If I did, I'd short 10,000 Google shares and laugh all the way to the bank. Because the only direction that stock is headed is down.
WTF is that Vivismo about?
e ry =bonding&v%3Asources=HP&v%3Aproject=demo&x=0&y =0
e d= 4&ratio=5&spons=1&searchterm=web&start=0&search.x= 0&search.y=0
Try this for a good laugh - supposedly this is a demo page for their excellent result-clustering technology (search: "bonding" site: hp.com):
http://vivisimo.com/search?input-form=simple&qu
Then try this on the visualizing super power Girafa (search for the word "web"):
http://www.girafa.com/vsearch/search.acr?search
That is truly hilarious!
Google should offer them 50 cents each.
Well, nice little pop at the open, but the question still remains... should investors be buying $10,000 worth of Google at any price, in particular with many millions more shares potentially coming to market in 14 to 90 days?
(this question does not require looking at the price-of-the-moment for the stock, which is trading heavily and flapping between 96 and 98).
A sucker is born every minute. Short this overvalued POS.
WTF is Google going to do with so much capital, anyway? What market will this money open up to them? It seemed like they were doing everything they wanted to do.
it's up to $140 as we speak. People that bought in at $85 made the right move. I'd be hitting the sell button right now.
Telecomms and PR Expert Ben Silverman has a very interesting analysis on PR Fuel of Google's PR gaffs (and the resultant harsh media treatment) of the company around IPO time. Choice quotes:
Whether it was a questionable interview with Playboy by company founders that almost derailed the IPO or the failure to properly account for stock options, Google's missteps have been high-profile and surprisingly amateurish. Google's brand with consumers has not suffered as a result, but in the media, the company's respect level is at an all-time low.
--
The PR people at Google, I have no doubt, are well aware of the challenges they face in going from a privately-held company to a publicly-held company. Up until a few months ago, I had faith that the company could handle these challenges without much fanfare or problems. But in light of recent events, I'm more skeptical about how the company conducts itself with the media and public at-large. Perhaps Google was just too perfect for its own good.
---- scrm
Google correctly predicted the opening IPO price range at $135. (It peaked at $142.) People and institutions flooded the auction with low ball offers and negative publicity. The IPO buyers who flipped immediately made a good profit. The Google employees will still make a good profit. The company Google gets screwed by only realizing 60% of the opening IPO price.
I doubt you 'shorted a boatload of it'. Usually its impossible to short a stock until several days (or even weeks) after it IPO's. The stock market people need to establish the options arrangements before you can short and I dont think they have done that yet.
Yahoo chart of Google stock price
I'm not sure if the initial peak is simply a rendering "start" artifact or not.
/b
|f(x)dx = F(b) - F(a)
Opened at $95 currently at $103 ... lets see what happens of the next week.
think before you write, it'll save me moderator points.
I've been wondering the same thing. It seems a little bit strange that we have to rely on a commercial entity to do web searching. Why couldn't we have a distributed peer-to-peer search engine thingy? Every time I wanted to do a search, I'd first have to help perform someone elses search. We'd also need to have some authentication like the PGP web of trust to be sure that Widgets-R-Us wasn't out there spoofing search results. Are there any technical/practical reasons why this couldn't be implemented in the future?
No, it means that they will finally have the cash to figure out how to index every persons hard drive and put it on line for instant searching!
Maybe they should hire a few "Morality Officers" to keep them honest and tell them when they've gone too far. That might have stopped a couple of recent privacy lawsuits!
Contrary to popular belief, coding is not all free blow-jobs and beer. Those things cost MONEY!
Nah its gonna suck because now google has to answer to its investors. How long before it starts to look like MSN, in the name of profit.
Have you ever been to a turkish prison?
It was never at 85. it opened at 100, and if you were smart enought to buy then and sell at 140 then you made a little bit of cash. If you were smarter and did't buy, wait until about 3 months from now when the price is like 20 - 30 dollars. Besides it is at 103. so we've seen a 40 dollar swing in 3 hrs. Yup. lots of chumps out there.
If you were not so smart to buy and then sell quickly, pull out now before the bottom drops out.
The only people who make money on these kinds of IPOs are the broker firms, 'special high influence' people, and the employees of Google who got their shares dirt cheap / free.
-Mark
Dovie'andi se tovya sagain.
If Google started to charge 10.00$ U.S. per month for unlimited use of their service, would you pay?
I dunno. I don't think it's *much* more complicated than that, but I don't think that's the whole story, either.
Frankly, the past couple of months have been rather embarrassing in a juvenile kind of way - kinda like the first year of the Clinton administration. Here you have a very successful young company with a LOT of Ph.D.s running things. I just think they figured they were smart enough to get away with changing the rules wherever they wanted without causing any undesired consequences.
I think they went for a complicated IPO that favored smaller investors and kept more of the IPO profits for themselves because they remember the IPOs of 1997-2000. Companies like Yahoo were IPO-ing at, like $20/share and then on opening day the price would skyrocket to like $200/share and Google looks at this and says "All of that extra $180/share went to someone other than us because the system is skewed toward the boneheaded jerkola monkeyboys in the financial industry. WELL SCREW THAT! We're smart enough to not make that mistake."
So, even if the market isn't anywhere near *that* juicy right now, Hey! They're Google! They've got buzz *and* street cred *and* good press, *AND* the're the only major IPO game in town right now! And, with everyone watching, they decide on an auction format that keeps the IPO price much closer to where they think the market will end up trading the shares.
And, as you can guess, giving up that figurative $180/share doesn't sit well with the boneheaded jerkola monkeyboys in the financial industry who are^H^H^H **WERE** in a position to profit. My guess is that they tried (as much as possible) to ear-massage their clients down to devalue the IPO.
Anyway, then you add in the quiet period infractions and the unaccounted-for pre-distributed shares and I just think the Google boys needed an old Wall-Street network financial consultant on the payroll to sit in on their meetings and say "No." a lot, because the whole thing has come across as somewhat amaturish.
"Lawyers are for sucks."
- Doug McKenzie
not much on /., bud. now the product of your glitchy fingers is to be enshrined until the end of the digital age... ;D
They will buy in, but those who bought at the top won't make a bundle but those who bought in at the bottom may make something. With the usual IPO, those underwriting the issue ensure that the price bottoms out - but this is very expensive.
The usual technique of bulling the market, as you rightly say, doesn't apply here.
See my journal, I write things there
Will someone please give me a link to this "Google" company?
Agreed. I wasn't even an economics major (did CS), and I took three classes that covered Dutch auctions.
I'd rather be lucky than good.
One way to boost your stock value; 1) promote a great free and currently unavailable service like gmail, with internal advertisements, for what seems like ages. 2) Go IPO 3) make this service finally available to the public. 4) rake it in. - ta da!
I'm actually double majoring CS and economics.
People are often like "hey, those are totally different". If only. Once you get out of undergraduate economics, CS algorithms get used for economics problems _all the time_ (dynamic programming, for instance), and economics has a surprising amount of relevance when trying to write efficient AI code.
-Erwos
Plausible conjecture should not be misrepresented as proof positive.
In Other News: http://biz.yahoo.com/ap/040819/google_ipo_29.html reports that "Still, in true dot-com fashion, a scheduled summer picnic planned for Friday in a park near Google's Mountain View headquarters is expected to turn into an IPO party
I sure hope they have enough beer this time!
http://www.seroundtable.com/archives/000738.html
Because of course making your web site unusable is the best path to increased profits... (seriously, one hopes that investors and management realize that Google got where it is today by not sucking, and don't mess with it)
I don't care if it's 90,000 hectares. That lake was not my doing.
I'm actually double majoring CS and economics.
That's exactly what I did, business skills (common sense economics) and technical skills (how to program) are a rare combination.
It's a good combination to have.
Cheers Koz
Well, I am bothered, I wanted to at least login and look around.
I don't think I will have a GMail account. It feels wrong.
Voice communication. You talk, you remember, unless it is recorded, wappo, gone.
Letters: Throw them away, 1gb of snail mail entropy would be a major fire hazard.
SMS: Delete delete delete (unelss it is a funny one with a nudie woman!)
MMS: See above
Email: Difficult. It is a communiucation *and* a file transfer technology. It is easy to leave them there. But I think it weighs us down!
I started claening out and aggressively deleting emails, if necessary extracting the informaiton contained therein into a useful form (if it is a contact, sotre as a contact, if an appointment, store as an appointment, if it is a task, store as a task)
Email is being overloaded with uses. Dump it. In fact, send email with a document definition, and let your client handle the filing into a real app that deals with it (or a viewer plugin, semantics etc)
#hostfile 0.0.0.0 primidi.com 0.0.0.0 www.primidi.com 0.0.0.0 radio.weblogs.com
I've read that most institutional investors are staying far, far away from this one - that's pretty telling, in my eyes.
On the other hand, the word is that institutions wanted Google IPO to fail, badly. Google shunned the whole establishment, which was used to the 'traditional' IPO process which allows seleceted bankers, their friends and bussiness in the loop to make a killing on major IPO offerings. Depriving them of serious income is expected to cause some bad blood.
I wouldn't altogether rule out that interpretation also.
hahhaa ;)
Maybe a) They each (co-founders) have new girlfriends... (playboy bunnies?)
or b) Buy hard drives for the millions of gmail accounts...
Founder & COO, Hayai India (hayai.in) / USA (hayaibroadband.com)
Everyone I know got 6 invites last week...
Founder & COO, Hayai India (hayai.in) / USA (hayaibroadband.com)