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Google Files to Sell 14.2 Million More Shares
dabug911 writes "Google Inc. on Thursday said it has filed with the Securities and Exchange Commission to sell 14.2 million shares of class A common stock, an offering worth more than $4 billion at Wednesday's closing stock price.
Could they be getting the money together to finance all these rumors we keep reading about?"
Google has announced plans to buy NASA from the United States government. In a press release sent out this morning by Nathan Tyler, Google indicated the need for better, more direct access to the data it manages.
In a brief interview this afternoon, Tyler had this to say:
"I mean, after Maps [maps.google.com] and Earth [Google Earth], it was pretty blatant where we were going. Everyone on campus was asking, 'When are we buying NASA?'. The NASA acquisition will offer us access to a variety of communications avenues that would have cost a fortune to contract. Also, it's imperative for our upcoming Google Earth Live... but I've said too much."
That what was all this school was for... to teach us how to solve our own problems. -- janeowit
And the rumor mill keeps on spinning. Wake me up when they DO SOMETHING.
They want their pre-bubble investing environment back.
Trolling the trolls who troll the trolls since '92
they're out of toilet paper.
Could they be getting the money together to finance all these rumors we keep reading about?
The Doormat
If you're not outraged, then you're not paying attention.
hmmmn
And fire all the reporters.
then no qns asked. ;-)
thats what people say.
Do they really need $4 billion to create a new instant messaging application?
The cat's in the bag and the bag's in the river.
Good thing I sold all my Nortel shares @ $125 - and jumped into google with their IPO @ $89 Bubbles always burst
..."cash out and run for the hills".
Why read the article when I can just make up a snap judgement?
Could they be getting the money together to finance all these rumors we keep reading about?
They just wait for rumors to appear about what they're going to do next, then just finance them and build them quickly...
The Doormat
If you're not outraged, then you're not paying attention.
Google is profitable. Can they remain so?
Whether or not these dilute the current holdings, the company has a very nice financial profile. It will be interesting to see if they can keep profits up while they start to expand.
Jesus saved me from my past. He can save you as well.
... the famous mathematical constant, alpha-omega = 14.2 million.
Or are they cashing their extremely inflated stock?
whatever happened to "request a feature" button... Now were gonna need a "plant a rumor" button...
Just imagine the chefs they can hire for four billion dollars!
We are going to conquer a country. That 200 billion dollar in cash for arms and infantry doesn't just pay for itself you know. We expect to need 40.000 troops to take Syria, and 200 troops to completely overwhelm the Dutch army.
They're the most innovative, impressive company in I don't know how long.
But they've hired like crazy recently. They're parking lot is so full that they offer valet service - and that fills up too!
I wish them the best though, because they rock.
because I have been enjoined by this Holy Office to abandon the false opinion which maintains that the Sun is the centre
and let the rumors and scandals begin!
could it be that they're cashing in while the price is right. I'm sure they'll expand into other areas but we shouldn't assume that their building a nestegg now has anything to do with the rumors we've seen.
Google, operator of the leading Internet search engine, said it intends to use the net proceeds from the offering for general corporate purposes, including working capital, capital expenditures and possible acquisitions of other businesses or technologies.
The company, however, said it has no current agreements or commitments to any material acquisitions. Pending acquisitions, Google plans to invest the proceeds in highly liquid, investment-grade securities, according to the SEC document.
I think that very nicely clarifies what is going on. Very clear and quite obvious. Yep.
Advice for my fellow geeks: before seeking out that threesome you dream of, you might see what a TWOsome is like first.
Recurrent capital raising is not really a good sign. At mittedly this is only their second bite at the cherry, but it's a second bite at (lets' be honest here) exorbitant and inflated prices.
All these diverse ofeerings come at a cost - some will be hugely successful, and some will not. The fact that Google is having to go back to the well so soon is possibly a sign that their expansions aren't as profitable as they'd like as much as a sign of desire for more expansion.
Jedidiah.
Craft Beer Programming T-shirts
They're just selling additional shares to bring that $300/share price down a bit. You don't want to have your stock all held by the big boys of investing who will turn on you and your company on the proverbial dime. Better to involve the smaller investors too so that one less-than-incredibly-spectacular SEC quarterly filing won't tank your stock. Companies need to diversify their investments just as much as us individuals do.
Why? What did you think they were going to do? Free wireless access, with a VPN client that also delivers advertising (textads only, no flash animation) based on the web page you are currently looking at, or based on your browsing history if you aren't looking at web pages? With direct support for Internet Explorer, and support for alternate browsers if you use the Google Web Accelerator?
Whoever corrects a mocker invites insult;
whoever rebukes a wicked man incurs abuse.
--Proverbs 9:7
...the Google business model, evidently. How is it that Google makes money, exactly? Is it all based on sites paying them to be listed when you search? Surely AdSense doesnt make this kind of loot.
Sorry for the dumb question. It just came to me when I was reading the story.
VOTE!
And I say this as someone who's been investing since the 1970's and didn't panic during the IPO craze of the late 90's - which was very very good to me and my family ...
Just because a stock is valued at $XX today doesn't mean it can't just as easily go down as up.
And when something is new to the market, valuation is still uncertain and the risk of it going down - contrary to most investors expectations - is higher than the risk of it going up.
However, as a caveat, I should say that some of the secondary offerings and post-IPO investments in certain companies have been very very profitable for me - Red Hat, Coach - which I bought at IPO, held for a bit, sold all or part of, and bought back in when most insiders unloaded their shares.
So, it's more a question of: Is Google worth MORE than this valuation in the future and is this BETTER than other investments?
I'm putting money in Japan and Euro value plays mostly - with money in dividend yielding energy stocks that AREN'T oil-based (wind, solar, geothermal, nuclear fission, clean coal).
But if you want to spend your money, do what I do - never invest more than you can lose, and if it's risky - unless you're really really certain [e.g. RedHat or Coach in my case] - spend LESS than on a typical investment.
For example, I usually invest around $10,000 in a normal investment, $5000 in a slightly risky investment [a hunch], and $1000 in a highly risky investment [most IPOs and risky stocks].
Your mileage may vary.
-- Tigger warning: This post may contain tiggers! --
And they are going to provide free wireless access on Mars.
___
If you think big enough, you'll never have to do it.
advertising revenue is pretty much the source of all of Google's profits.
I never spellcheck and I freely admit it. Save your karma for more worthwhile "lol erorrs" replies
All right I'll bite.
The original intention of the Isreali government after the war was to use the Gaza strip as a bargining point; not to settle people on it.
1.IPO 2.Buy moon 3.Secondary IPO 4.Buy super-laser 5.??????? 6.Biiiiiiiiiiiiiiilliiooooooooooons in profits!
I never spellcheck and I freely admit it. Save your karma for more worthwhile "lol erorrs" replies
Okay, so GOOG is trading near $300 a share and they want to raise some more capital - great. Just help me understand where their money comes from.
As best I can tell, Google makes money on:
(1) AdWords (is this like 90% of their revenue?)
(2) Intranet searching licenses for those sites who allow you to search it with a Google search, but maybe this is a free service Google offers
(3) They sell those yellow Google blade servers that look cool but I think accomplish the same as (2) above.
So how else does Google make money? Every damn thing is free. Gmail, maps.google.com, Google Earth. As a consumer I am not complaining, but as an investor, I won't touch GOOG with ten feet of CAT6.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
The rumors are true!
What's the best way for a stock market newbie to purchase some of this stock?
Online? Throung a magician-agent? or what?
If you don't know what AltaVista is (was), get off my lawn.
After all, the people who buy into Google really don't give a shit what it does or how it does it as long as it makes money and pays good dividends. I don't know exactly what portion of Google will be in "public hands" after this, but if they've sold off enough of the company they could just wind up like almost every other company in the business.
Maybe I'm sounding a little paranoid, but I really think that going public and giving partial ownership of your company to people who don't share your creative vision is just a bad idea. I don't invest in the market myself, so I can't speak for everyone, but isn't the point to make money? Eventually a unique company like Google that's been pushing new and innovative technology and forcing competitors to work just as hard to keep up, will eventually stagnate and become more of a conservative business that would rather rest on its laurels and make money rather than strike out an pioneer new grounds in the industry.
Would a company all about the money offer 2GB email inbox sizes, a wonderful and easy to use online mapping service, and a great search service? Personally I think they'd turn out a little more like Microsoft, spending more time talking about all the innovative things they're doing rather than actually doing them and settling into a state of mediocrity.
Here's the form filed with the SEC: http://sec.gov/Archives/edgar/data/1288776/0001193 12505170553/ds3.htm
They're just selling additional shares to bring that $300/share price down a bit. You don't want to have your stock all held by the big boys of investing who will turn on you and your company on the proverbial dime.
Taking any action to purposely bring down the value of your company would be illegal. If they wanted to make a more attractive price point to fool investors without $300 into buying their stock because it appears cheap, that's what a stock split is for.
I'm a big tall mofo.
Finally, my google fix. Now I can get on with life.
I think they're gathering money to buy Apple.
I smell a new golden age for the repo business...
The usual way to bring down share price while maintaining value is to split the stock. In a 2-1 split, that roughly means each $200 share turns into two $100 shares. No sane company wants to intentionally reduce their market capitalization..
I'm starting to believe more and more in what fuckedgoogle has to say. All of the posts link to a news article, anyway, so they're somewhat founded.
The article says that one of the things they need the cash for is possible acquisitions. It seems they are acquiring a lot.
;))
One of the recent ones that I have not read about on slashdot is android
What's interesting about that one is that it's being speculated that they have been creating an Operating System for cell-phones.
(That should be enough to have another 50 stories on slashdot about people pondering what technology is going get involved with next.
Short Google!
Theres are easier way to do that without relinquishing more of the company to the public. SPLIT.
They're just selling additional shares to bring that $300/share price down a bit. You don't want to have your stock all held by the big boys of investing who will turn on you and your company on the proverbial dime. Better to involve the smaller investors too so that one less-than-incredibly-spectacular SEC quarterly filing won't tank your stock. Companies need to diversify their investments just as much as us individuals do.
I find two things unbelievable:
1. Someone is stupid enough to write this
2. More people were stupid enough to think it rational
AMAZING!
Wow, now they might be a 10th of the way to buying Apple . . . Google is smart, and whatever you think they are doing, they are probably doing something else. Slashdot is a great rumor mill but factual evidence is lacking here, except for a few posts. Do you really think Google would take a huge risk this early in the game? They are planning something and I for one am very curious...
whatever happened to "request a feature" button... Now were gonna need a "plant a rumor" button...
That's what the BBSpot Slashdot Story Generator is for. Sooner or later, one of these will get through per year, then several, or not. I note Dupe-A-Mania has been somewhat less of late than the early summer high.
Google needs a "stop and shore up what you already have" button before they spread out thinner than a supermodel with a fresh supply of laxatives.
If my grammar and spelling are off, I am [distracted/tired/careless] (take your pick)
They're gearing up for a hog wild Winter of Code!!
marketing sentence: Google will sell several million shares of its stock.
translation: Google will quickly find some suckers to buy its outrageously priced stock. There's one born every minute.
Thank you for taking today's lesson on marketing speak.
I think that Google is a great company, but I cannot see how their insane stock price is justified. It is all just speculation.
/ url%5D I mean, check out their P/E ratio!
[url]http://finance.yahoo.com/q/bc?s=GOOG&t=1y%5B
Google is very cool, and their mission is basically to become the next library of Alexandria, which I think is awesome. However, how on earth do they plan to make any MONEY?
(For those of you who are considering buying some of this new issue, I strongly suggest you read 2 books: "The Intelligent Investor" By Ben Graham and "The Future for Investors: Why the Tried and True Triumph Over the Bold and New." by Jeremy J. Siegel.)
Google is very cool - but it is really just grep on steroids. I can't see how shares in this company at this point will benifit the shareholder.
Try to hack my 31337 firewall!
I've seen comments in a few places that suggest that imeem is linked with Google. There was a story yesterday asking whether imeem was the next google? It's like a client application that does everything you'd ever need, it apparently caches and indexes content so that search queries get shared amongst the clients in the network and data gets swarmed out. Brilliant idea, but has anyone else heard the google rumours?
Does this mean the Google bosses think their stock price is a little too high?
So what? TV networks make billions and everything they sell is free. This is like that, only with 2 big differences:
1. Google has perhaps loaded up on more talent in their field than any company since Edison.
2. They aren't actually breaking new ground yet. They're just executing an existing industry/strategy - online search funded by online ads - better than anyone else.
And difference #2 is good news for investors. They aren't a bolt of lightning like Netscape, they more or less earned their good fortune. Netscape = Apple, Google = M$.
I'm pretty confident they have a good idea of what to invest in, as M$'s attempt to catch up online continues into another decade...
->This advice is provided for entertainment purposes only-
Time to buy a TON of Google! This time is REALLY different! I'm pouring everthing into Google! Just as soon as I finish selling all of these tulip bulbs ...
[Insert pithy quote here]
This looks like they are setting up for a stock split as well they are just adding more stock so when it hits steady at 300 dollars per share or whatever arbitrary number they set they will have 14 million more shares which they would not of had before.
An Education is the Font of All Liberty
14.159,265 million shares to be exact. 3.14159265... Cute...
There's a reason why you want to invest a reasonable amount in every stock. It's so that you seriously think and research it before pulling the trigger.
If you invest too little in a stock, not only do not make much money, but you tend to get lazy. Instead of doing all that tiresome reading and analysis of the financial reports, circulars, credit rating reports, and so forth, you just say "what the heck, it's only beer money", and buy.
This is most important at high risk levels because that's where research really pays off. For 5-year investment-grade bonds, for example, research isn't as critical.
Booya, Jim.
From what I gather from people that work with Google, sometimes at Google or their partners, Google is going after cell phone users. The ability to search on your phone, find local points of interest, use it as a social network and do VoIP. Google's cell-phone related aquisitions support that theory. It's anyone guess what this $4B would go towards but one could speculate (as people always do about G) that the money could go towards an effort to overhaul cell phones.
I'll bite, too.
thousands of people are being evicted from their land and homes
That story should sound quite familiar to their neighbors as well. You simply have to move the quantity up by two orders of magnitude.
Sharon will not last long...
Polls show that most Israelis support the Gaza evacuation.
Now we simply need a West Bank withdrawl (excepting a shared Jerusalem), normalization of land and water agreements, normalization of work relations (which would address the ~50% Palestinian unemployment problem that has fuelled many Palestinian militant groups - huge numbers of Palestinians used to work for Israeli farms and businesses), the right of return with unimproved land compensation, endorsement of the entire plan by neighboring nations (easy to get, as the Intifada breeds homegrown militant groups who are dangerous for them - you could probably even get compensation for the actions of *their* evictions of *Jews* during the 30s and 40s, and make up for most of Israel's costs), and acceptance of the agreement status by Jewish and Palestinian militant groups... and at the same time deal with returning the Golan Heights and Shebaa Farms and exchanging apologies (plenty to go around from both sides) with the neighboring nations, establishing normalization of relations with them... plus getting the general populace of all nations involved to agree with the settlement... then you'd have peace in the middle east!
See? So simple!
("This word 'simple' - I do not think it means what you think it does...")
Value of PI == 3.14159265....
Google sells == 14,159,265 shares...
You have to love a company so cool that even something as boring as a secondary stock issue can be made into an inside joke for geeks.
How novel! The rest of the world moves on while a few thousand people are stuggling with their own problems. I wonder if this phenomenon will ever repeat itself?
12 hours without a Google story. Slashdot is too predictable. What to change things up a little bit? I know ... let's bash Microsoft ... oh wait ...
Two things
1. Google is better than any investment in the world right now. Their brainpower puts Mensa to shame.
2. Stop giving investment advice on the internet. No one asked and no one who is in their right mind would log onto their ETrade accounts after reading the ramblings of some Slashdot poster.
Mac OS X and Windows XP working side by side to fight back the night.
On a somewhat related note why don't you guys post more on whats going on with Yahoo and MSN? I know Google is wonderful news and all but these guys have things working with their Search Engine too.
For some reason I refuse to use either spell check or the spacebar properly.
I hate to sound naive here, but with everything that google has done, they could have made so much more profit, but they havent. I believe that there are some good people left in this world who aren't only this to make themselves rich, and are basically here to only do good things. I believe what you see here is a new generation of philanthropists arising form the ashes of a burning corporate world.
~~"Of course, that's just my opinion. I could be wrong." ~~Dennis Miller
LOL! All that says is that the company plans on spending the money. Not to be a Troll, I just admire Google's vague honesty about what it's going to be used for. Obviosuly they need more money to work with. Funny. It's like if I was to post something like, "Today is payday, and I plan to use the money earned to finance certain portions of what I'd deam to be my projects in relation to my personal needs and wants". I just need to pay rent, want a beer, and need some gas in my car. Concise.
Generation Trance: What generation are you?
I can only presume that Page & Brin have finally decided to launch their finest product: The Google Money Bin.
Two things,
1. There's voting class shares, then there's non-voting class shares. The majority of voting class shares is still held by the company, by the founders in fact. Control of the company has never been an issue.
2. Google isn't generous. They're smart. They're not offering free email boxes to be nice. Nor are they offering free mapping services to be nice. Google is an advertising company. In order to advertise at your best you need all the information about your demographic that you can get. Google tracks *EVERYTHING* thats done on their systems and with their products. Ever notice how the ads in gmail are always relevant to the content of the email? They have servers reading everyone's email so they can target ads better. They take this information they gather and are thus able to offer more efficient and effective ads to their clients.
Mac OS X and Windows XP working side by side to fight back the night.
Sorry man but its all about the bottom dollar. They're a public traded company and in that arena getting rich is the ONLY thing that matters.
For some reason I refuse to use either spell check or the spacebar properly.
A "Secondary" Inital public offering is a contradiction in terms. It's NOT another "inital" public offering...it's just an offering of stock
Their land? I believe those Palestinians lived there already for a thousand years until suddenly some Israelians took it from them.
"The day Microsoft makes a product that doesn't suck is the day they make a vacuum cleaner."
You're thinking of Apple.
Heh, someone saw it... I was hoping for a "funny" moderation for my post, but I decided to just quietly walk away with the "+3, Informative."
Advice for my fellow geeks: before seeking out that threesome you dream of, you might see what a TWOsome is like first.
Is it me or does the parent sound like some "stock tips" spam that's been going around lately?
- My uid ends in 69...
Negative! That's 200 chefs to completely overwhelm the Dutch army!
What the heck are these guys doing that's going to require somewhere between 40,000 and 200,000 man-years of effort?
I don't know.
It sounds like a pyramid scheme to me.
Investors must be expecting pretty amazing growth for this company for a long, long time, as it maintains its profit margins all the while.
At these prices, no wonder they're making a stock offering. Time for investors to run screaming naked into the hills.
Google introduces nation-wide free wireless; Massive exitement.
Google buys Apple; Massive exitement.
Google buys TimeWarnerAOL; less exitement.
I dunno. But some are more likely than others, and it seems likely that the market will hype it.
"A language that doesn't affect the way you think about programming, is not worth knowing" - Alan Perlis
Google needs the money to fund purchasing an O/S. RedHat, Novel, or other. Or since Slashdot is a Apple fan site: Google wants to buy a big share in Apple! Though I think that will not happen I just needed to say it.
In THEORY, a secondary offering has no impact on current shareholder...
Let us assume that Google is worth $75b (its really 77, but 75 makes easier math).
So, it's pre-money value is $76b. Pretend Google is selling $5b work of shares. Now, Google has an additional $5b in cash, making its value $80b. However, everyone has been diluted. So, your previous 1% of Google is now 15/16 of a percent, but the company is worth 16/15 what is was before.
Now, assuming that Google has a profitable use for that cash, then Google takes that $5 and turns it into $25b of value (but loses the $5b in cash). Now, the new Google is worth $100b. So while you own a smaller share, at the moment of sale you were made whole (by the cash coming in), and you benefit from the increase in value.
However, reality is NOT so kind. In reality, Google selling $4b worth of shares will probably be at a slight discount, to encourage the big funds to pony up the cash (you don't normally unload $4b of shares on the open market and hope for the best), plus the bankers get paid. So the company ends up diluting by more than the net cash position improves.
Assuming Google has a profitable use of that cash, you should still come out ahead, because Google will in theory sell $4b in stock, collect $3.8b, and as long as they turn it into at LEAST $4b of value, you're even, and at $8b-$10b, you come out ahead...
Now let's add a little more reality. Generally, companies deploy their capital in less and less valuable area, which makes sense. If you have 20 profitable investment opportunities, each of which take $1m. If you have $10m to invest, you do the top 10 of them. If you get an extra $10m, you choose the less valuable ones, and if you are stuck with investing another $10m, you either sit on cash or chase the 10 best unprofitable activities to look busy. That's part of why dividend companies with reasonable payout ratios look so good on a dividend-reinvestment basis, they only chase REALLY profitable activities.
In addition, Google is very profitable, so it should be able to chase most of its profitable investment opportunities. With a P/E of 80, the implied cost of capital is MUCH higher than a junk-bond offering, which would only expect an 8%-10% return (interest) compared to investors expecting an 80% return (no I'm not doing the math, but its a ridiculous annual return to justify paying 80 times trailing earnings, somewhere in the 40%-80% annualized range).
Therefore, the non-financial view of the situation is: profitable companies that think their stock is undervalued do stock buy-backs, which boosts EPS, and make sense if the company believes that their stock is a better investment than any other projects that they could invest in (meaning they can only get a 20% return on new projects, but a 40% return buying their shares), and tend to do secondary offerings when they think their stock price is high (meaning, they can get a better return on the money than the market, they expect the company's stock to be a -10% return and they can get a 3% (money market) or higher return on the cash).
I would consider this offering bearish, even though the fundamental financial analysis looks closer to neutral.
Alex
You know, flamebait and all, I'm kind of growing fond of the get-some-priorities-person. The troll keeps working too, it's amazing.
I think I'll stop here.
You are completely mistaken. There is no dilution.
While more shares are issued, the amount of assets Google has will increase by $4bln. Therefore the amount of assets per share remains exactly the same
and the share price (at least theoretically, assuming efficient markets) is not affected.
Yeah, sure: colonies where created on someone's else territory to allow the "existance" of Jews.. You must live in a very strange world.
I think you just meant secondary public offering.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
Google has huge potential for services based on their server farm/architecture. For example:
Google could sell company denial-of-service protection. Traffic could be routed through google's farm. Google could filter the wheat from the chaff. Also google know lots about valid clients via GoogleCaching, cookies, GMail accounts, GoogleDesktop, etc...
Google could automatically vet valid clients versus zombie attackers. With googles huge server farm it could withstand a zombie attack of a hundred thousand boxes.
All Palestinians want this?
I'm know Hammas wants to eradicate Israel, but I'm not sure about the 'eradicating Jews as a people' bit. So Israel shouldn't negotiate with Hammas. Whic I agree with.
Grandparent poster was pretty reasonable. I know many Palestinians won't want to go for it, but the question is whether they'll still have the steam to fight, international support, etc. when they can't also go and say "The Israelis want to deport Palestinians to Egypt and Lebanon. We're going the way of the Native Americans unless you send your kids off as walking pipe bombs."
___
It's the end of my comment as I know it and I feel fine.
Companies frequently buy back their own shares when the board considers its stock undervalued.
Google is doing the opposite.
A good analogy for what Google did was first they got one credit card (the IPO). They maxed this credit card out with lots of hirings and acquisitions (Dodgeball?). Now to stay competitive with MS and Yahoo they need to get another credit card....maybe to buy that Chef they were talking about. However, unlike any normal kind of debt, they have no obligation to pay it back, or even pay interest (a dividend) on this. They probably figure their earnings will suck for Q3, so they might as well get as much cash out as they can before the ship sinks. Maybe they can aquire some other company that has a more stable income and pray that keeps them afloat.
Semi joking troll aside, People say they got this cash out to make an aquisition, but really they could have done that with a stock swap (like most large mergers). They make a billion in profits every quarter, so it can't just be to pay salaries and buy computers. They really just want to take advantage of an over inflated stock while they can...as its been falling for a while.
Rule number one (or perhaps ten) in corporate finance: If your stock is overvalued - issue more shares!
Benefits the original shareholders handsomely, and if your stock is hyped enough, you will not suffer any "pecking order" side effects.
Only thing is that the PhD people are paid way more than the average IT guy out there. Count at least $250k per person, which makes 16,000 man-years. But trust me... they're not going to hire that many people... they're going to buy other companies
lol you don't know much about islam... Iran for example used to have a huge sign hanging outside of their foreign ministry stating "Israel must burn." Almost all islamics hate israel and i guarantee you that you couldnt find one "radical" islamic who didnt hate israel...
And one marching band to invade and occupy Sweden with. Any college band will do.
Apparently they are offering 14.159265 million shares... and if you dont see the connection, pi is 3.1459265 (take off the 3. and put a . in after 14). Just something interesting I found that I would relay along.
They need the money to help offset California's outrageous gas prices.
Well, $1000 might be my annual beer budget. Or maybe I should call it "30-year-old malt scotch" money.
Google is better than any investment in the world right now.
Are you sure about that? I hear oil's been doing pretty well. Try not to make statements that are so obviously gross exaggerations. Google is not the safe bet you seem to think it is.
Like woodworking? Build your own picture frames.
If Nortel had sold a bunch of shares in the $80s to raise a big cash horde, then the fall would not have been so bad.
I bet that they just want a big cash pile stocked up, which they can get now for few shares, but maybe not in the future.
> At mittedly this is only their second bite at the cherry
:)
Wow, I think we've found a new "eggcorn"! Admittedly, I don't think changing apple to cherry is one, but "at mittedly" certainly is!
(For those who don't know, "eggcorn" is an eggcorn for acorn, which manages to bring up some very strange mental images
Google wants to buy an O/S provider, like RedHat, Novel (SuSe), or someone else. No, not Apple :p.
0, Redundant?
It's stupid to punish me for pointing out that someone noticed that it was funny rather than informative.
1. Google is better than any investment in the world right now. Their brainpower puts Mensa to shame.
...
I've heard that one before - reminds me of Enron, actually
2. Stop giving investment advice on the internet. No one asked and no one who is in their right mind would log onto their ETrade accounts after reading the ramblings of some Slashdot poster
Except I'm the guy - ok, my other WillAffleck account, but the same person - who gave people practical advice when the Red Hat IPO happened, including what the NASD and SEC were and how to contact them.
We've been thru this hype before. I didn't say it wasn't a good investment - heck, I still have a few hundred shares of Red Hat today - I just said that a secondary IPO for Google has - implicitly - a higher downside risk than the initial IPO and that you should think before you leap and consider not putting all your eggs in one basket.
That's not risky advice, it's sound advice - and you know it. So, how many shares or options of Google do you currently hold or have influence over? My guess is it's more than you've said so far.
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They pobviously need to hire more people to fix their broken google maps pointers! Both in photo and shematic mode, the map pointers are frequently (USUALLY) off by blocks and even miles!
Mapquest is rarely wrong and the two car GPS mapping systems are also very rarely wrong. What's up with Google maps?!?!?
Is the advance of google technology more important that accuracy?
except frequently, a secondary IPO is an offering of an amount of stock (or bonds or ETF) that is equal in size or larger to the initial IPO.
So if one couldn't get shares, it means a large chunk gets offered up all it once - technically it can mean the stock drops a bit for a while, after the initial excitement, and once can pick up a few shares in a week or two for a lot less.
But, in practise, that is not normally the case.
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Because pi is a secret only dorks know.
All of this "news" about Google is boring me. It seems that every day there's at least one story about this SINGLE company. Let's diversify a little bit.
Has anyone noticed that when you zoom all the way into Google Moon past the resolution of their images, it goes to a swiss-cheese background? I love these guys... finally a big name company that isn't afraid to have a sense of humor!!! I haven't yet found the man on the moon, but I'm sure it's somewhere on that site!
Is it me or does the parent sound like some "stock tips" spam that's been going around lately?
Nope, it's just you. I turn those in to the SEC at the San Francisco branch all the time.
I did point out what I'm doing, I'm not planning on buying into Google, but I usually get involved in four or five IPOs a year, so my advice is worth what you paid for it.
[they're not charging for slashdot yet, are they?]
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It doesn't... I'm not terribly interested in evaluating Google's business, just pointing out that a secondary offering in theory is a neutral event, in reality SHOULD be a positive event, but OFTEN is a negative event.
:)
If you want real analysis, I suggest hiring a financial analyst and have them spend about 4 hours with spreadsheets... not ask for it on Slashdot...
But, in a nutshell, if Google has a business plan for deploying $4m that will let them extract monopoly rents for the next 5 years, then that would drastically increase their profits once the monopoly is secured and allowing them to extract monopoly rents (monopoly rents = economics term for the excess profit generated by a monopoly or partial monopoly... i.e. Internet Companies in general are in a monopolistically competitive field, where each company is differentiated... unlike say, farmers with corn... so there is a small monopoly rent, but it isn't like Microsoft that carries a monopoly on a complete market... the fewer competitors, the more "rents" extracted, and an oligopoly, like the search engine market, has each player potentially extracting large "rents")...
I mean, Google did something short of $1b last 12 months (or run rate, or something, I forget, I'm not an analyst and don't really follow Google's financials)... If you assume that with a monopoly on the market (to the point where everyone else takes what Google leaves on the table, Google's earnings go from $1b to $4b, then Google should increase 400%... except that the P/E probably drops in half as growth slows, so Google marketcap should increase 200%...
In any scenario where Google puts the money to profitable use, this SHOULD be a good deal for the shareholders.
However, in the likely scenario where Google wants to use its "overvalued" Marketcap to raise money, this is BAD for shareholders... NOTE: this isn't inherently bad... I'm not suggesting that they are being bad fiduciaries... I'm suggesting that they may want to use this small 5% dilution to increase earnings by 20% or more, making this a GOOD fiduciary action, but it is likely that the company is doing it now because they expect the price to fall, making this a bad omen, even if the right financial mood.
A high P/E stock has a HIGH discount factor of future cash flows, with an expected return on investment FAR ABOVE the worst of the junk markets... If Google didn't expect a price drop, they should fund via debt, not equity, to maximize shareholder value... That said, tech companies tend to not like debt, and not pay dividends, trying to increase their internal value.
Alex
But if they have credit card debt, they probably should not be investing in the stock market at all.
Exactly my point.
Paying off credit card debt should be assessed as if it were any other type of investment. How many investments do you know that...
* Pay 10 to 20% annual return guaranteed.
* Are tax free.
* Are risk free.
* Lower your cost of borrowing.
* Lower your anxiety level.
Now, if you have a match on retirement savings - I have a full match on 7.5 percent of my salary for example - that has a higher return than paying off credit card debt.
Let's say you put aside 1 percent and they match 1 percent - that's 2 dollars for every dollar put in - better than a credit card. Let's say it's a 2:1 match - you put in 2 dollars they match half - that's 33 percent, still better than even rate-gouging credit cards.
But, in general, you're right.
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Comment removed based on user account deletion
... though I imagine we'd almost rather speak in C ... :)
To answer the stupid-ass question posed in the article:
Yes.
``Marx argued that everyone deserved to own the means of production, equally.''
Marx argued no such thing. What Marx argued is that everyone deserves to own the products of his or her own labor. The position you present as Marx's was that of Bauer and other left-Hegelians that Marx had little truck with.
``Lefties argue mostly the same thing -- that everyone is equal''
As do most righties, or at least what passes for a right wing in today's post-modern world. For the most part, left and right are both firmly in the tradition of classical liberalism which presupposes that everyone is fundamentally autonomous and, in this sense, is equal. This view stands firmly in opposition to the classical conservative position that some people, by virtue of their nobility, were more equal and deserved to be kings, queens, dukes, or duchesses.
Now, a small portion of the modern day left-wing espouses various forms of egalitarianism. That said, most lefties recognize that there are natural differences between various persons. What the the left tends to argue is that, as Rousseau observed, that certain artifacts of social life have magnified these natural differences to the point where they are absurd and detrimental to human progress as a whole.
``Capitalism is not the inverse of this (as most Lefties mis-interpret it). It declares that the capital (and means of production) should (and eventually will) flow to those most capable of using it efficiently; to produce a maximal, non-trivial result.''
But the problem is that Capitalism depends on assumptions about the free market that are demonstrably untrue. The elements of ``perfect competition'', as but one example, are absurd. There is no perfect freedom into and out of every industry, rather, every industry has a rather large barrier to both entry and exit. Consumers and producers do not have perfect knowledge of past, present and future. Consumers do not always buy at the market equilibrium price. Producers do not always sell at the market equilibrium price. Not all goods are identical commodities as demonstrated by the effects of branding upon the market.
You were complaining about the maxim that ``Remember, the cost of everything turns back into man-years of effort.'
This notion is the foundation of neo-Ricardian economics. Modern neo-Ricardian economics can account for well over 90% of the fluctuations in prices in the free market. Neo-Classical supply/demand price theory, which you seem to be equivocating with capitalism, cannot come close to this empirical track record. Pick up Sraffa's ``The Production of Commodities by Means of Commodities'' for a good starting point.
``Proof: You spend 1 man-year acquiring a shovel and digging a ditch. I spend 364-man days designing, acquiring parts and building a back-hoe, and 1 day digging 100 times as much ditch.
``You are claiming that these man-years are identical. They are clearly not, hence your premise is false, by reductio-ad-absurdium.''
Actually, you just misunderstand the labor theory of value which argues that the value of a product is always determined by labor. One does not have to assume, as you do in your 'proof', that all labor is identical in value, only that there is a direct causal relation between the labor that creates a product and the value of that product. In this view, most firms set their own price rather than the price being determined by a market equilibrium. Consequently, you're argument is entirely built of straw.
When Google went with their IPO they issued 2.71828183 Billion shares. What is the significance of the new issue? 14.2 Million? $4 Billion? I got nuthin'
I can't think of a single explanation for this strange move that would be even remotely positive for Google's stock price.
1) If Google really wants to acquire companies, they can do so with stock rather than cash. Wall Street would look more kindly on an all stock transaction, rather than an offering followed by a cash transaction. In that context, the only reason to do this offering is to monetize stock that is seen as overpriced by the management of either Google or its acquisition targets, or both.
2) If instead Google wants to use this money to fund organic growth, the scale of investment it implies is staggering. Google has a few billion in cash and is generating free cash flow at a rate closing in on a billion a year. If that is not enough cash for Google's organic growth needs, one has to wonder whether they are in need of some adult supervision.
3) If Google wants to sit on the cash and earn interest, without any other near term goal, that is an admission that in the view of management, Google's stock appreciation potential is no better than current 4 or 5% interest rates. That would hardly be good news for investors, who are paying a high P/E premium in the expectation of market-beating growth. This inescapable conclusion seems to be lost on Mark Rowen at Prudential, who claims that the dilutative impact of this offering will be offset by interest earned on the proceeds, all the while reaffirming his price target of $400! Only an fool would want a stock with 40% appreciation potential diluted with cash earning 4%. Such a statement can only be disingenuous; either Rowen is desperate to put a positive spin on bad news, or he does not believe his own price target.
I'm genuinely curious if anyone can come up with a financially rational positive spin on this news.
Martin
It's obvious that they are using some of the money to fund the Google Foundation.
Yeah, and that whole Jewish war thing back around the first millenium when the Romans marched into Israel, crushed the Jews who lived there and renamed the land to Palestine... everyone knows that's just a zionist invention and that Jews didn't actually exist more than a hundred years ago. Silly historians.
Jews have lived in Israel before Islam was a religion and before the name "Palestine" was ever inveted by the Romans, and they have done everything in their power to live there since that time.
Nearly every other people on earth, with a few exceptions like the Kurds, have a nation. And even the Kurds have land.
The notion that you can steal land from Jews and it's legit, but the reverse is a horrible offense is just a pretention at morality.
___
It's the end of my comment as I know it and I feel fine.
It's one thing to be an individual philanthropist, but it is another thing entirely to take the money that investors have given you for your company and give it away.
Corporations exist to make their shareholders money. If that it not their intent, then the corporation is basically performing an illegal act. If the Google founders really did intend the company to be a philanthropic organization, they never would have sold shares of the company in the first place.
Philanthropy is good, corporations are good, but corporations that are philanthropic is very bad.
What's the value of Google if IE7 defaults to adblocking their text ads?
I wouldn't want to put my money into a company that Microsoft could so easily swat like an annoying fly. We already KNOW that Microsoft are prepared to take illegal action to kill competition, and this move wouldn't even be illegal.
A pizza of radius z and thickness a has a volume of pi z z a
Most of the people here say it might not be a good idea to invest in it right now.
Is it a good idea to get it if you want to have it and/or help the company? In other words, have stock not just for monetary gain.
Why don't you guys have friends or journals?
"Assuming Google has a profitable use of that cash"
Let's hope for the investors sake that they aren't following Viacoms lead.
Viacom reciently bought a website that allows children to create "virtual pets" for $160 million: www.neopets.com
Great post. If all posts on slashdot were as informative as this, the world would be a better place.
Curiously, do you think Yahoo is undervalued? Recently they announced Adsense like services, which is where the majority of Google's profits are from. At ~$34 a share and google at $279, there has to be some serious room for growth IMO.
By my calculations, this is only 1.4 x 10 ^(-93) of a googol.
What is really interesting about this story is that this secondary offering will be done "old school" using investment bankers. The fact that they are going back to Wall Street after their much flaunted dutch auction IPO is very telling.
Seems like the Google leadership takes a lot of pleasure in messing with investors. The exact number of shares being issued is 14,159,265. Which happen to be the first 8 digits of Pi.
Spencer Ogden
As I originally stated, as long as fair market value is obtained, it's theoretically useless... As stated elsewhere in the thread, I basically gave a textbook explanation.
You invest $1 in company X.
The company is worth $100, and you own 1%, 1 share of 100 outstanding.
Company X realizes that it needs $100 to expand.
Company X sells 100 shares, and receives $100.
The company is now worth $200. Basically, this was a neutral event, no effect on income statement, and on the balance sheet, Cash (an asset) went up by $100, and Paid in Capital went up by $100.
Any analysis of the stock should figure out the value of the business (not counting cash), plus the cash on hand... P/E doesn't, but a discounting cash flow should. P/E is a simple overview and assumes that cash in a "normal amount."
You still own 1 Share, worth $1. You are EXACTLY where you were before.
However, you have half the "ownership."
Now, if the company uses that $100 to create $200 (of value), in one year, the company is now worth $400. Your one share is worth $2.
Now, without dilution, your share (1%) would be $4, but that isn't real, because without that $100 the company would still be worth $100, so you'd only have $1.
See? That increases your value, IF the cash is put to good use.
If the company screws up, and when they sold 100 shares, they only received $50 because of all the fees, then the company was worth $150 and your share 75 cents, OH NO. If they turn that $50 into $100, the company is worth $200, and you are back to $1. If they turn that $50 into $0, bought pets.com, then the company is only worth $100, and your investment is worth 50 cents.
In other words, if you believe management has a positive use of cash, this is a positive event (although I'd prefer debt given Google's high P/E and therefore high discount factor... or the market expects MASSIVE growth for YEARS without a high discount factor).
If you believe management has a crappy use of cash... well, this is a bad event. However, if they really misuse their cash, you should sell the stock while it is worth $1, before it becomes worth $0.
Alex
don't send infantry, they get stuck in traffic or the mud. Invest in planes.. Any 737 will do :-) Aim for Rotterdam..
no, forget that, nobody here cares about that city anymore ..
Can you offer any ideas in the nuclear sector?
Fuck it
I think we all know Google's next "project"....world domination. controlling the world by controlling the flow of information, am I the only one a little nervous??
FYI you need to look at the market cap for each company not the stock price AKA.
IF there where 10,000 Shares of Google at 279$ and 100,000 Shares of Yahoo at 34$
Then Google would be worth 2,790,000$ and Yahoo would be worth 3,400,000$.
Can you offer any ideas in the nuclear sector?
GMP - Green Mountain Power has been very very good to me, and sometimes I've bought Con-Edison when it's been cheap.
Not that interested in nuclear sector, more established firms that can leverage wind power and make a good profit and dividend. Notice that FPL is doing an RFQ for more power generation in today's Wall Street Journal (ad in there), and have some GE holdings for example. Some Spanish firms good for wind plays.
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In all fairness...
My haftorah was the sending of spies into Caanan.
But with that being said....
Anyone that demands Israel return any land from a war should also be for the return of the Falkland Islands to Argentina....
When in doubt, parenthesize. At the very least it will let some poor schmuck bounce on the % key in vi. (Larry Wall)
I see all these posts wondering how Google makes money on all these *free* services.
:-)
The answer really is simple: volume.
(For the humor impaired, a reference to Saturday Night Live)
Well, yes, almost by definition the point of a business is to make money. A public endeavor that doesn't intend to make money is called a charity. I think the implied question is: Is the point of a business to make the most money?
I have an idea for a new kind of jigsaw puzzle that I'd like to sell someday. I've spent time developing it, mainly because it interests me. But it's certainly not the most profitable use of my time. The same thing happens in a private business. I know of a great little shop on Lake Michigan that sells deep fried fish. I bet the owners could make better money doing something else (the shop is in the middle of nowhere, ten miles from any town), but they like cooking fish by the lake.
Google says "You can make money without doing evil". But the people buying stock don't necessarily share that sentiment. Or, they wouldn't mind doing evil to make more money (see Enron). So I think it's legitimate to worry that a publically held company can lose the vision of its founders.
AlpineR
OK, when is the United States Government going to give its land back to the Native Americans?
Here's some food for thought.
You know those wireless network rumors? Well, they've been known to be buying fiber *globally* as early as the beginning of this year. wifi.google.com resolves, and supposedly there's an operating Google wireless network in San Francisco.
Now, the question many have is why Google would pursue this. Well, let's connect the dots. One of the other big rumors is GooOS; that they're going to provide their own streamable operating system.
With the current state of broadband in the US, that wouldn't be possible. With fiber, you can certainly mount a remote server as a drive if you wanted.
Taking it a step further, what if they went into the ISP business? Offering tiered service, with the paid accounts coming with GooOS? Instant marketshare taken from Microsoft and Apple.
Goole Browser and GIM could simply be elements of GooOS. Their purchase of Dodgeball and recently Android points towards mobile phones and SMS... which could mean they're either looking at a mobile version of GooOS, or they're looking at VoIP. (Yahoo! did buy out a VoIP provider recently, after all.)
I'm sure one could go on and on about this, but my tin-foil hat is falling off...
98% / year revenue growth cannot be sustained for long in any but the smallest of companies. Indeed, it has already significantly slowed for Google. Exponential extrapolation is always a dangerous business.
What's more, Google has a rival - Yahoo - which will likely result in reduced profit margins. And the smell of profits has attracted the attention of that big fat stinky bear Microsoft.
One has to make too many optimistic assumptions to value Google at $280/share for my tastes. Course my opinion is worth everything you paid for it.
01235813 million shares just didn't cut it...
*groan*
--bank
Those who are late do not get fruit cup!
I never denied dilution, I argued that it should be theoretically neutral.
You currently have 50% of $1. That's worth 50 cents.
What happens if I change that to 25% of $2? That's still worth 50 cents.
In THEORY the shares are sold at market price, therefore the dilution is compensated for by the increased value.
Assuming Value of Company = NPV(all future cash flows) + cash on hand
Company sells 10% of itself for 10% of its value.
Everyone owns 90% of what they did before, but the company is 110% the size, so it's a wash, yes I'm simplifying on the percentages each way... it's an example...
budget overview pdf.
-- Trinity in high heels carrying a whip: The donimatrix - there is no spoonerism
I, for one, welcome our new Google overlords.
They are also looking to look scathingly at France until they surrender.
sorry so late but was out of office today.. so this google
offer is unusual in that the vast majority of aquisitions are
stock based, sometimes with a cash kicker but rarely all cash
except for relatively small deals (a few 100 million).
So why does Google go this route of raising cash first when
they already have about 2.5B in liquidity? My suspicion is
they either a)expect a significant decline in the stock
price and are taking advantage of the current high price to
increase liquidity (note they said general corporate purposes
which does not in any sense obligate them to make a takeover),
b) expect a significant decline in their stock price which
could present difficulties for an all stock deal and hence
wish ot increase cash on hand in case it is needed to
sweeten the pot
This also could be, though a review of the original filing
would be needed, a way for the insiders to unload some
stock down the road. Issue new stock today to raise cash,
buy some company down the road for stock, arrange an
internal private equity deal where insider sells all or
some portion of the necessary shares back to the company and
receives cash at the current market price. This would be
advantageous to the company were the stock price below where
they float this new offering as they would have excess cash
left on the books.
I think google should dump more stock on the market. Heck, all the insiders seems to do that anyway. Google should just go out and buy one of those media company like CBS, NBC or ABC
Google is better than any investment in the world right now. Their brainpower puts Mensa to shame.
With all those smart people at Google, how come we're not seeing more Linux support? Why haven't they made Linux versions of web accelerator, Google video player or the Google Desktop?
SEO Copywriter. Just Say ON
Check out Baidu (http://finance.yahoo.com/q/bc?s=bidu&t=1y%5B/url% 5D), which analysts are hailing as the Google of China.
If the stock market crashes again, which it looks poised to do, then it would be very wise to get as much equity out of your stocks now while you have the chance. The folks at google, I'm sure, are no dummies when it cones to the market.
The bottom line is that the housing market is about to collapse (soft landing, yeah right, where have we herd that before), the bond market is way over inflated, the dollar is looking really crappy in the currency markets, the debt levels are extremely high and savings extremely low, and most stocks (like google) still have high P/Es. Fundamentals wise, this is a doomsday scenario if there ever was one. If things continue on the same course then look out for the worst of the great depression of the 30's and the worst inflation of the 80's combined!
Have people been blind to prices lately? I hate to burst peoples bubble, but the price of oil relative to other commodities hasn't risen that much - it is the US dollar that is going to hell! Not oil! - as everyone keeps thinking the cause is some kind of oil supply problem.
IMHO, I would recommend to google and anyone else, to sieze any gains, cut any losses, and start very seriously considering copper, gold, and silver assets and mining stocks.
Buying Novell, Google will soon be a major player on the linux market. Finally the very good Suse distrib will get somewhere !
A better comparison to Israel would be Northern Ireland.
Your "faith" in corporate netizenship is mind boggling.
I'll certainly concede that my terminology is imprecise. But I think your last paragraph is telling and illuminates the basis of any diagreement we might have, ``Any economist will tell you that the two main economic models are monopolistic competition (only Nike manufactures Nike shoes) and oligarchy (OPEC).''
This is not the case in most of the US, which is dominated by neo-classical economists who generally contend that economy approximates perfect competition even if it never perfectly reflects such a state. This claim, to my knowledge, has never been empirically verified by any study. But, from what I understand, in the rest of the world, there is a much more variation and a more realistic assessment of economic models.
And even if we say that perfect competition isn't necessary and hold a theory about option trades leading to general welfare, we still have problems. The claim that all (or even most) people are rational (in the economic sense) is highly contentious. Further, there are several markets: education, health care, defense, and security where planned economies do a measurably better job than a competitive market.
...PI is a number that only geeks would spot in ordinarily mundane things as the previous poster's comment.
Turn based strategy game that runs over XMPP. Phalanx
had a huge IPO, let it go to their heads, lost focus, lost market share and failed to execute as well as M$. But they bought a lot of luxury cars and made a lot of money for a while. Of course, Apple was always more talented and more meaningful, but the comparison is still valid.
Apple had a near monopoly and is now an also-ran. They have a niche, luxury product in a commodity business. They make excellent products, I just recommended them to my sister-in-law, much simpler than being her sysadmin. Their Ipod is awesome.
But 'bumper profits' for Apple is still something M$ sneezes away every quarter. They're kind of like Ferrari, nice company, great products, small market share, modest but reliable profits, and a little innovation that mostly core fans care about. The Ipod's a different story, sure, but it's still in potential fad territory. We'll see.
But now I've made another 'bad' comparison, eh?
Because they smartly realize its a waste of time. How many people do you think use all flavors of *NIX (except for Mac OS X) combined?
Mac OS X and Windows XP working side by side to fight back the night.
IN THEORY, it should be a neutral event. You are "whole" after the event, and if the company deploys the capital better, you win despite the fundraising.
IN PRACTICE, you lose money because of fees/costs, in addition, each expenditure of capital is normally less efficient than the previous one, therefore, if the company does a major dilution, it is often a losing deal.
FROM THE ORIGINAL POST onward, I explained why in practice this is NORMALLY a BAD thing.
I simply pointed out that it isn't "theft" or anything else, since it is theoretically a neutral event with positive justifications.
In other words... it's not really a good things for shareholders, but it isn't a violation of fiduciary obligations because on paper it is a neutral to positive event.