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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 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.
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.
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 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
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? =)
I love the way it says "Did you mean: good shares "
While I think hyping ones own company is important (and required in this day and age) I believe that Google was elevated to a high status (both by themselves and the community) to such a point as to make them seem "saintly" (for lack of better words). :)
The initial estimates of their price created such hype and talk -finally it deflated, by a good amount (IIRC the initial estimates were up to 120 per share?).
I remember reading the articles last year, prior to Google going IPO - saying how important this would be to our economy - how Google would save the stock market with all the trading fee revenue, etc... And then came the articles that Google doesn't want to IPO - they want to remain "pure" and "uncompromised" by not having a board of directors and shareholders who would force them to become "evil." In the end, it was a great marketing strategy - playing "hard to get."
If anything, the whole ordeal tired me out and now that the time came, I feel more blah then what I should. Hmm maybe it is because its a "blah" morning for me - but I expected something more cool when I hit Google website - anything - throw the comman person (who won't spend 85/share) a bone
Those are my feelings - I do not expect many people to agree with me - but then, that is why these are feelings (opinions).
Thanks for listening
I mod down so you can mod up. Your welcome.
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 don't understand WHY Google IPO'ed.
As I recall comments from the initial announcement, Google had grown enough that they had to start filing stuff with the SEC like a publicly traded company (which costs lots of money in overhead) anyway, so they decided they might as well go the whole nine yards and raise some money too. Or at least that was one hypothesis.
"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.
All the banks/brokerages I use are ready for it, the ISIN number has been assigned (US38259P5089).
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.
>I do not see how a share can be fairly priced ...
>why the SEC allows this practice?
I assume that this is the heart of the question.
The purpose of SEC is not to determine if a share of a company is fairly priced or not. Thats your job.
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
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!
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.
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
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).
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.
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
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)
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?