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Google Sets IPO Pricing

Hemos posted more than 10 years ago | from the dear-lord dept.

Google 466

It appears that Google has set their IPO price - 108$ - 135$ per share. Yowza. A reminder that this is done through the Dutch Auction ? process, which makes that pricing even more...uh...interesting.

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Probably worth it though.... (4, Insightful)

BWJones (18351) | more than 10 years ago | (#9800807)

Wow, this kinda reminds me of the Palm IPO pricing bit, where when I found out about the price per share, I lost complete interest in purchasing any and told my broker to not purchase. (boy am I glad about that). However, this is a different matter in that the search engine is in just the beginning of its time here while the Palm IPO was what.....8 years after the Newton was released? Also, even though I am a fan of the Palm Pilot, Palm has had no real innovation going on for quite a while (it would be nice if Apple had released their PDA to force folks to innovate a little more). While Google on the other hand is still running their company like they are actually interested in innovating and are forcing a number of fairly sizable companies to innovate to keep up which is always good for the consumer. This is a company that I will be interested in investing in even at $108-$135/share.

Re:Probably worth it though.... (4, Insightful)

Sc00ter (99550) | more than 10 years ago | (#9800844)

"However, this is a different matter in that the search engine is in just the beginning of its time here while the Palm IPO was what.....8 years after the Newton was released?" I don't know about you, but I remember using search engines in '94, that was 10 years ago.

Re:Probably worth it though.... (1)

BWJones (18351) | more than 10 years ago | (#9800943)

My point was that while innovation has stagnated with the PDA market, innovation in the search engine market has been impressive.

Re:Probably worth it though.... (2, Insightful)

GoofyBoy (44399) | more than 10 years ago | (#9801128)

The search market engine really hasn't made impressive leaps.

1. Type in keywords
2. Get list of pages which are relevent.

Step 1 hasn't changed in a long time.
Step 2 is more like a battle against spam. How to avoid misleading (intentional or unintentional) pages.

What makes Google interesting is that it had really nice clean hits. Better than others. Now, due to popularity, its getting worse and worse.

Not much innovation recently.

Re:Probably worth it though.... (4, Interesting)

Anonymous Coward | more than 10 years ago | (#9800907)

I find it difficult to believe that this stock price can be maintained... It puts Google as about 60% of the value of the US auto/truck industry (GM + Ford), or about the value of Boeing.

The only people making $$ on this are those in the middle, or those starting out with Google shares.

Re:Probably worth it though.... (0)

minginqunt (225413) | more than 10 years ago | (#9801010)

Those steps in full:

1. Make enormous amounts of money at IPO
2. ???
3. Profit

Step 2 is intentionally left blank as an exercise to the reader.

Re:Probably worth it though.... (4, Interesting)

NoMoreNicksLeft (516230) | more than 10 years ago | (#9801015)

Not that simple. Also depends on how many shares they sell. I seem to remember some high-faluting company that has $10,000 per share prices... but there are only a few thousand shares of stock issued.

Would it make you feel better if they issued stock at $20 per share, but put 5 or 6 times as many into circulation?

Re:Probably worth it though.... (5, Informative)

admdrew (782761) | more than 10 years ago | (#9801174)

Berkshire-Hathaway's A stock [yahoo.com] was worth just over $88,000 per share this morning. Their B stock [yahoo.com] is almost $3,000.

You mean Market Cap (4, Informative)

stecoop (759508) | more than 10 years ago | (#9801019)

I find it difficult to believe that this stock price can be maintained

You mean the market capital of Google wont be able to maintain that price right? The Market Cap = the Stock Price * the Number of shares; therefore, the stock price alone dosn't mean reflect the value of the company.

According to the article; Which you're correct the market cap of BA is 39.80B and Google wont be able to keep that for long.:
WASHINGTON (Reuters) - Google Inc., the world's No. 1 Web search provider, said on Monday it hoped to raise as much as $2 billion in its highly anticipated initial public offering and could have an initial market cap as high as $36.25 billion. About 24.6 million shares will be sold in the IPO for between $108 and $135, according to an amended prospectus filed with the U.S. Securities and Exchange Commission (news - web sites).

Re:You mean Market Cap (3, Interesting)

ThosLives (686517) | more than 10 years ago | (#9801130)

Hrm. If you sell 24.6M shares at $135, and only raise $2B, where the heck did the other $1.3 B go? (24.6M x $135 = $3.3 B - and I know they're not paying 30% to the underwriters!)

Also, how can the market cap be $36.25B when 24.6M x $135 = $3.3B? For the market cap to be $36.25B at 24.6 M shares, the share price needs to be $1473.58. If the share price is $135, that means there are really 268.5M shares and less than 10% were made public.

Perhaps there was a misplaced decimal point in that $36.25B number?

Re:Probably worth it though.... (5, Interesting)

swordboy (472941) | more than 10 years ago | (#9801119)

I've always been fascinated by people's fixation on the share price when it means absolutely NOTHING in the grand scheme of things.

A stock's value is calculated by the share price times the total number of shares outstanding. Now, Hemos was quick to comment on the share price, but lacks the understanding to figure out just how much cash the company is raising and what the total value of the company will be at these levels.

But who cares?

It really doesn't matter because the average investor doesn't know any better. This is the same reason that stocks go up when the company announces a stock split [sec.gov] . The idiots eat these stocks up because they think that there's something magical about owning a stock through the split. "The company gives you more shares", responded an ignorant investor after I queried him on his voracious appetite for buying companies that are ripe for splitting. What he failed to realize is that the price drops proportionally - the value of the company (and each investor's holdings) is the same before and after the split. But nevertheless, owning these companies through the split is often a very profitable [stocksplits.net] method of investing simply because of all the ignorance out there. Never underestimate the power of stupid people in large quantities.

It makes me want to shoot myself in the face.

Heil Hitler (-1, Troll)

Anonymous Coward | more than 10 years ago | (#9800812)

Heil DER FUHRER

Heil indeed (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#9801008)

Now that we're getting closer to the presidential elections in November and the time for both great democratic and republican conventions has arrived, I think it is only fair that us trolls take time to honor our grand democratic process.

Therefore, I propose that everyone who reads this post creates a presidential /. nick. For example, "President Reagan", "President Bush", "President Kerry" or, if you're really twisted, "President Nixon".

Let's give /. a presidential trolling! Let the freedom ring!

Web index as revenue generator (5, Insightful)

manmanic (662850) | more than 10 years ago | (#9800816)

I think it's a fair price. It reflects the money Google will make in future from selling access to their web index and associated technology [google.com] - a market that they haven't even begun to seriously develop. The Internet is going to be around for ever, and its content is going to keep growing exponentially until this scary vision [bizreport.com] is fulfilled. Google's search results represent (to date) the best attempt to organize this information in an intuitive user-centric way.

In fact, they already provide programmatic access to their results via the Web APIs [google.com] , spawning services ranging from a recipe generator [researchbuzz.org] to a site for detecting online plagiarism [copyscape.com] . According to this story [theregister.co.uk] , the developers of Google Alert [googlealert.com] , one well-known APIs application, have recently been granted permission to commercialize their service. My guess is that it won't be long before there are many more 3rd party Google applications, bringing in a lot of new money to Google's coffers. Anyone for a BUY rating?

Re:Web index as revenue generator (2, Insightful)

markkellman (662190) | more than 10 years ago | (#9800922)

I'd probably give it a cautious BUY...

I think there will be some serious hype-driven bubble inflation during and immediately following the IPO. They may take measures to prevent it, such as selling more stock, but once the shares are out on the open market, ther'es not much that can be done.

The third-party stuff does look pretty promising though...

Re:Web index as revenue generator (0)

Anonymous Coward | more than 10 years ago | (#9800981)

Call me stupid, but isn't a post-IPO rally quite unlikely after a Dutch Auction style IPO? It pretty much guarantees that everybody who could be buying your shares for more than you paid already has what he wants, doesn't it?

Re:Web index as revenue generator (3, Insightful)

SilentChris (452960) | more than 10 years ago | (#9800959)

"I think it's a fair price."

Any investment analyst will tell you that it's far better to have numerous low-priced shared than a few high-priced ones. At this price, a moderate investment (let's say $10,000) gets you only about 100 shares. That means you're completely at the mercy of the stock price (which we know to be oh-so-stable in the tech industry).

No, what'll be interesting is to see what mutual funds grab onto Google as part of their portfolio, and at what percentage. We know it's "risky", but is it considered growth? What percentage will make sense in a mutual fund? 5%? 25%? Those are the questions I'd like to see answered.

Re:Web index as revenue generator (0)

Anonymous Coward | more than 10 years ago | (#9801023)

Any investment analyst will tell you that it's far better to have numerous low-priced shared than a few high-priced ones

Only those that spend their time talking out of their collective arse. Graned, that description covers a lot of investment analysts, but...

But here's a clue: The price per share doesn't matter. If you buy $10K of stock, and the price halves, you've lost $5K. It doesn't matter whether you had 10,000 $1 shares or one $10K share, you've still lost half your money.

You are always completely at the mercy of the stock price.

Re:Web index as revenue generator (0)

Anonymous Coward | more than 10 years ago | (#9801093)

But here's a clue: The price per share doesn't matter. If you buy $10K of stock, and the price halves, you've lost $5K. It doesn't matter whether you had 10,000 $1 shares or one $10K share, you've still lost half your money.

what's heavier, a pound of bricks or a pound of feathers?

Re:Web index as revenue generator (0)

Anonymous Coward | more than 10 years ago | (#9801141)

Are those chicken feathers or goose feathers?

Re:Web index as revenue generator (1)

SilentChris (452960) | more than 10 years ago | (#9801126)

"If you buy $10K of stock, and the price halves, you've lost $5K. It doesn't matter whether you had 10,000 $1 shares or one $10K share, you've still lost half your money."

How often do you see shares valued at $10K each? Ok, how often do stocks split (for a variety of reasons, high price being one of them)? I rest my case.

Re:Web index as revenue generator (3, Insightful)

Jahf (21968) | more than 10 years ago | (#9801129)

Take a look at the past ... Cobalt, VA, Red Hat all skyrocketed to this price level after their IPO. The only people who got the opening price were friends of brokers and the companies didn't see anything past the opening price. Yet they still changed hands readily throughout the day at those prices.

I don't think there is any question that all the shares will sell. If they don't change hands after selling, Google isn't going to care as they will still have raked in billions with this price instead of hundreds of millions with a lower price.

Is it actually giving anyone a -break-? No ... this price is no more friendly to the casual buyer than those other IPOs (well, not true, a couple of those went far past the $135 mark on first day so it is a boon there). But it is no less friendly to that investor either.

The difference is the brokers and their friends don't get an immediate cash-cow, they're on the same playing field. If I can't get a break, at least I know that the rich dudes didn't either.

Re:Web index as revenue generator (2, Funny)

ceeam (39911) | more than 10 years ago | (#9801020)

"... its content is going to keep growing exponentially ..." etc...

Welcome back from your coma! Things have changed in the last 5 years... :-)

Seriously - how many useful sites still working w/o subscriptions? How do they index "protected" content?....

Re:Web index as revenue generator (3, Insightful)

Jahf (21968) | more than 10 years ago | (#9801094)

We already know that Google has been in spats in the past for indexing protected sites and providing ways to get around them.

I think if I were running such a site I would see about creating a system whereby if I saw Google coming in I would give it 25% of the content (which means the majority of the keywords needed for good indexing will have been sent out) along with a "please click here for more" link.

I personally don't -like- that kind of stuff, but that is not my point ... such services are missing out when they completely block Google from indexing them.

Besides, how many -useful- sites protect there content? I'd say that they are in the small minority today.

Re:Web index as revenue generator (4, Insightful)

SunPin (596554) | more than 10 years ago | (#9801024)

The Internet is going to be around for ever


Isn't that what they said about the Titanic? Hubris has a dramatic way of destroying things. Google could suffer the same fate at this asking price. Pets.com seemed like a really cool investment in its day. Same goes for Dr. "kung fu" Koop.com.

The Internet itself will die soon for a variety of reasons (spam, peak oil, Super bugs, the Apocalypse). Just don't be disappointed when it happens.

Re:Web index as revenue generator (1)

Zorilla (791636) | more than 10 years ago | (#9801125)

That's why slow growth is a good thing. The internet, as we know it, is a product of decades of work, not to mention there isn't a singly entity in control of it. The Titanic was rushed and a lot of corners were cut when it was built, which was obviously bad in the long run.

And then there's Pets.com, which thrived off, and only off of, a very abnormal time in the economy. As soon as things returned to normal, dead. The internet will be around for a while, seeing how it's already endured this much.

Re:Web index as revenue generator (0)

Anonymous Coward | more than 10 years ago | (#9801156)

Isn't that what they said about the Titanic?

Um, No.

The Internet itself will die soon for a variety of reasons (spam, peak oil, Super bugs, the Apocalypse). Just don't be disappointed when it happens.

Just like Postal mail and the telephone.

New Meaning (5, Funny)

plexxer (214589) | more than 10 years ago | (#9800818)

'I'm Feeling Lucky' takes on a whole new meaning.

Re:New Meaning (3, Funny)

minginqunt (225413) | more than 10 years ago | (#9800932)

"I'm feeling wealthy"

Returned 0 of 0 results. Sorry, we're too busy out back rolling around in our cash.

frist psot! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#9800822)

Ohhh yeahhh!!!

second pr0st? (-1, Troll)

Anonymous Coward | more than 10 years ago | (#9800823)

teh fail?

Investors or the public? (2, Insightful)

garcia (6573) | more than 10 years ago | (#9800824)

It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I don't feel fine...fine...


While I love the idea of Google raising money for its business I am still keeping my fingers crossed that they can remain faithful to their customers rather than the random whims of their investors.

Re:Investors or the public? (0, Interesting)

Anonymous Coward | more than 10 years ago | (#9800894)

Speaking of random whims of investors, how much of these shares can Microsoft soak up? C'mon.. a lot of people are curious, and 51% accumulation would mean a hostile takeover.

Re:Investors or the public? (1)

afidel (530433) | more than 10 years ago | (#9800958)

Well since ALL of the shares to be sold to the public are for less than 50% equity in the company I don't think you have to worry about that.

Re:Investors or the public? (0)

Anonymous Coward | more than 10 years ago | (#9800995)

And you think internal stock holders are beyond turning to the dark side? Think again. The stakes are high in this market, but the rewards would mean unimagineable multi-market domination. Sometimes a tinfoil hat is appropriate attire.

Re:Investors or the public? (5, Informative)

Cecil (37810) | more than 10 years ago | (#9800979)

and 51% accumulation would mean a hostile takeover.

No. Sergey Brin and Larry Page have Class B shares with 10 votes per share, and they own a third of the company.

This means that, assuming you want to have to get as few Class Bs as possible, you would need to own 100% of the Class A shares, along with 40% of the Class B shares, which are not for sale, I might add.

Good luck on that hostile takeover.

Re:Investors or the public? (3, Informative)

TopShelf (92521) | more than 10 years ago | (#9800984)

Google is only offering a tiny fraction of the ownership in this offering. If they raise $2 billion on a market cap of $36 billion, they've only let go of 5.5% of the equity.

Re:Investors or the public? (1)

pyrrhos (227998) | more than 10 years ago | (#9800955)

...faithful to their customers rather than the random whims of their investors.

My knowledge of capitalism is limited and I have a question:

Their current owners are also investors, with their interests. I don't see how going public, i.e., more (in number) investors, will change that, could anyone clarify this for me?

Re:Investors or the public? (5, Insightful)

Dr. Bent (533421) | more than 10 years ago | (#9800957)

I am still keeping my fingers crossed that they can remain faithful to their customers

Oh, you mean the people who advertise on google? Yeah, I think they'll do a good job of keeping those people happy. But people who use google's search engine just to find stuff are not customers...they're the product. Google main business is not selling search results, it's selling eyeballs. Just like any other media company (television, radio, etc...) who's job is to sell advertising, google's customers are the people who pay for advertising. When you start paying google to do a search, then you'll be a google customer...until you're the product.

Re:Investors or the public? (1)

pointbeing (701902) | more than 10 years ago | (#9800960)

While I love the idea of Google raising money for its business I am still keeping my fingers crossed that they can remain faithful to their customers rather than the random whims of their investors.

Google's investors will control the direction of the company. That's what shareholders do ;-)

High price but... (2, Interesting)

bdigit (132070) | more than 10 years ago | (#9800825)

Who will actually be able to even buy it at that price when it hits? Most people probably wont be able to get the stock until its even higher. How does one go about getting a stock at its IPO price?

Re:High price but... (0)

Anonymous Coward | more than 10 years ago | (#9800927)

Actually with this IPO, you CAN get shares at the IPO price. Just tell your broker that you want to be in the Google IPO auction and give him a maximum price that you would be willing to pay. If the auction price is at or below your price you will get some shares.

Re:High price but... (4, Informative)

thegrommit (13025) | more than 10 years ago | (#9800930)

Who will actually be able to even buy it at that price when it hits? Most people probably wont be able to get the stock until its even higher. How does one go about getting a stock at its IPO price?

Open an account with a participating broker [businessweek.com] .

That share price is nothing compared to Berkshire Hathaway [yahoo.com] . It's not the share price that matters, but the earnings per share ($5,190 in the case of Berkshire). A higher stock price is justified if earnings are high and have growth potential.

Re:High price but... (1)

Creepy Crawler (680178) | more than 10 years ago | (#9801163)

Wow, they're down quite a bit..

Im used to seeing them at around 87-90k.

Also, do you all know who founded Bershire Hathaway? Good ol' Warren Buffet.
Ever heard of Geico? Owner? Warren Buffet.

ALl I can say is Mr. Buffet Knows how to run his companies (and ditch them when theyre bleeding dollars).

Mutual funds (1, Funny)

artemis67 (93453) | more than 10 years ago | (#9800933)

Mutual funds have that kind of buying power, and I believe they comprise the largest segment of the stock market.

Re:High price but... (0)

Anonymous Coward | more than 10 years ago | (#9800970)

I agree the price will only go down. Think about it, if someone was willing to pay a higher price, then they dutch auction would have found that price level. This is late 90's bologna all over again. Look at most of the posts that say this is a fair price. They keep talking about how cool a company this is.

Tempting (0)

Anonymous Coward | more than 10 years ago | (#9800826)

That's a lot of moolah but I sure would consider picking up some. Hard to imagine it being a bad investment.

Hand me the pipe, man... (-1, Offtopic)

zyche (784345) | more than 10 years ago | (#9800828)

Sorry, but is Hemos on crack today? This is the second writeup in a row that sucks completly.

Re:Hand me the pipe, man... (1, Interesting)

zyche (784345) | more than 10 years ago | (#9800988)

Yeah, sure... Mod me as a troll. That doesn't change the fact that the story is more or less informationless. We already know about the dutch action process, and the starting price is meaningless as it will drop immediately.

God, someone submit a real article!

A bit steep for my tastes (5, Insightful)

Anonymous Coward | more than 10 years ago | (#9800829)

Seeing as Google is everyones darling child now, and they have had much coverage over their cool technologies and decent methods of doing business, it looks to me like a bad buy. In other words, the price can only go down.

IANAstockbroker, and i have no money to buy stock anyway.

Re:A bit steep for my tastes (1)

enforcer999 (733591) | more than 10 years ago | (#9800864)

I happen to agree with you. I think the price is set too high. They are over extending themselves at the moment and my concern is that their business model is going to fall apart. If I had the money to invest, I would wait. But hey, I do not have the money anyway so I am just an arm chair critic.

In case Yahoo gets slashdotted (0, Informative)

Anonymous Coward | more than 10 years ago | (#9800836)

Google Hopes to Raise $2 Billion in IPO

14 minutes ago

WASHINGTON (Reuters) - Google Inc., the world's No. 1 Web search provider, said on Monday it hoped to raise as much as $2 billion in its highly anticipated initial public offering and could have an initial market cap as high as $36.25 billion.

About 24.6 million shares will be sold in the IPO for between $108 and $135, according to an amended prospectus filed with the U.S. Securities and Exchange Commission (news - web sites).

Mountain View, California-based Google plans to sell 14.1 million shares, while another 10.5 million will be sold by stockholders. It has received approval to list its Class A common stock on the Nasdaq under the symbol "GOOG" (Nasdaq:GOOG - news).

The company plans to use the net proceeds from the sale, estimated to be $1.66 billion, for general corporate purposes. It will not receive any of the proceeds from shares sold by selling stockholders.

Additionally, Google reported second-quarter earnings of $79.1 million on revenue of $700.2 million, up from earnings of $64 million on revenue of $651.6 million in the 2004 first quarter, according to the prospectus.

Operating income for the second quarter was $171 million, up from $155.3 million in the first quarter, according to the filing.

A group of underwriters, led by Morgan Stanley (NYSE:MWD - news) and Credit Suisse First Boston, will have the option to buy another 3.7 million Class A common shares under the IPO.

Pocket change? (0, Troll)

Tebriel (192168) | more than 10 years ago | (#9800840)

I've got about $0.43 cents in my pocket. Anyone have $107.57 and want to go in on a share?

Change (3, Interesting)

Klar (522420) | more than 10 years ago | (#9800848)

Will going public affect google at all in terms of service, and their search algorithm? Investors won't get higher returns in searches will they?

GOOG as stock ticker (2, Informative)

Rovaani (20023) | more than 10 years ago | (#9800850)

GOOG as stock ticker looks wierd, I would have preferred GLE

Re:GOOG as stock ticker (1)

meringuoid (568297) | more than 10 years ago | (#9800883)

GOOG as stock ticker looks wierd, I would have preferred GLE

Nah. It should have been OOOO.

Re:GOOG as stock ticker (1)

suso (153703) | more than 10 years ago | (#9800906)

Or, GGLE

Re:GOOG as stock ticker (1)

JollyFinn (267972) | more than 10 years ago | (#9801173)

Blah. OGLE would of been optimal symbol.

Re:GOOG as stock ticker (1)

thbigr (514105) | more than 10 years ago | (#9800890)

Yuck, I agree. Maybe GOGL?

Re:GOOG as stock ticker (1)

KD5YPT (714783) | more than 10 years ago | (#9800952)

Nice, makes me think about goggles (very close to google).

Re:GOOG as stock ticker (1)

Short Circuit (52384) | more than 10 years ago | (#9800941)

I was thinking GGLE

Re:GOOG as stock ticker (1)

Anne_Nonymous (313852) | more than 10 years ago | (#9801122)

If it trades on NASDAQ it has four letters in the ticker. If it trades on NYSE it has one, two, or three letters. If it trades on AMEX, it's a piece of shit.

Make that "G" (1)

Baki (72515) | more than 10 years ago | (#9801143)

Why not G?
The current G (Gilette) should make place.

The market cap of Google and G whall be about the same (36 bn versus 39bn), a small rise in Googles share price and it has surpassed Gilette.

Ironic? (5, Funny)

Anonymous Coward | more than 10 years ago | (#9800861)

Does anyone find it ironic that this story is a Yahoo story?

Re:Ironic? (1)

edalytical (671270) | more than 10 years ago | (#9801033)

No, it's a Reuters story Yahoo just picked it up. The Financial Times is also running the story. I'm sure many others are as well.

Re:Ironic? (0)

Anonymous Coward | more than 10 years ago | (#9801111)

Does anyone find it ironic that this is a Reuters story?

'Quiet Period' not very quiet... (5, Informative)

WallaceSz (643543) | more than 10 years ago | (#9800875)

Despite their "quiet period", Google have been busy making all sorts of announcements over the recent months, no doubt to bolster their valuation before the IPO. Moving into email with Gmail [gmail.com] , entering the world of digital photos with Picasa [picasa.com] , adding a new adsense for search [google.com] program, and improving their corporate search appliance [google.com] .

They may also start leveraging the success of popular services that use their Web APIs [google.com] , such as Google Alert [googlealert.com] and Copyscape [copyscape.com] , particularly with the commercialization [theregister.co.uk] of Google Alert. Positioning themselves as a general technology platform for the web is surely a step in the right direction to further raising their valuation.

Will be interesting to see how quiet they stay from now till the actual IPO...

Re:'Quiet Period' not very quiet... (4, Informative)

gorbachev (512743) | more than 10 years ago | (#9800920)

The quiet period doesn't mean you can't comment on any business activities. You just can't comment on anything relating to the IPO.

Re:'Quiet Period' not very quiet... (1)

briggsb (217215) | more than 10 years ago | (#9801164)

And don't forget their new search results ranking formula [bbspot.com] .

In the FT this morning (4, Interesting)

Lawrence_Bird (67278) | more than 10 years ago | (#9800884)

story about underwriters crying about the whole auction process and fear that price will be so high that market collapses after. Given their idiotic pricing and occaisionally illegal distributions in dot bomb ipo's, why should anybody take them seriously? Of particular note is that they are being paid significantly less than a standard IPO.

Share price is irrelevant (4, Insightful)

gorbachev (512743) | more than 10 years ago | (#9800900)

The price of a share is irrelevant. What is relevant is how much of the company you get for buying the share, and how much the total value of the company in question is.

All other things being equal, 10% ownership priced at $100 is a somewhat of a better deal than .00001% ownership priced at $100.

Re:Share price is irrelevant (4, Informative)

Frisky070802 (591229) | more than 10 years ago | (#9800965)

Not completely irrelevant. For instance, companies will split their stock to make it more attractive (because stock buyers consider the price, no matter whether they should), and more to the point, they may do reverse splits when the price gets too low. One reason for that is that a lot of mutual funds and institutional shareholders won't buy stocks below $5.

So the higher it starts, the further it is from the $5 magic floor.

Re:Share price is irrelevant (1)

Moofie (22272) | more than 10 years ago | (#9801030)

The only reason stock splits are attractive is because people who don't understand the market think stock splits are attractive, and people who do understand the market exploit them.

Re:Share price is irrelevant (1)

hbackert (45117) | more than 10 years ago | (#9801090)

Point in case: MTF (Bank of Tokyo Mitsubishi). In Tokyo those shares can be bought for roughly 1M Yen (about US$8000). See here [yahoo.co.jp] That's the price for one share. Makes you think twice about getting those.

Re:Share price is irrelevant (1)

artemis67 (93453) | more than 10 years ago | (#9801091)

Actually, the P/E ratio sums this up nicely (Price Per Share/Earnings Per Share); a high P/E ratio would indicate a poor investment, a low P/E ratio would be a great return on your money.

Regardless, the stock price is going to be determined by the market, and primarily by institutional investors at that, who will correct the stock price long before you have a chance to invest. For example, Google might offer 10% of the company for $100, but because the institutional investors have advance knowledge and opportunity, by the time you get to invest it will have ballooned up to $1 bil.

It's nearly impossible for the average investor to make money on an IPO, because you just can't compete with institutional investors who will push the stock price towards a market equilibrium.

Re:Share price is irrelevant (1)

krishn_dev (781739) | more than 10 years ago | (#9801115)

Yes. Share price IS relevant. For an investor it is question of profitability/ROI. The risk associated with an IT company getting into red is considered much higher than that of many other type of industries. (of coz, there are exceptions). my $.02

Safe investment? (2, Insightful)

Turn-X Alphonse (789240) | more than 10 years ago | (#9800913)

can anyone not see Google doing extremely well in the near future? They maybe expensive but for the next say 5 years they will rise in value and be a pretty safe bet... but after that I dunno, Google is doing evetyhing now but will it still in the future or will it pull a microsoft and go "We're at the top, hello minions do as we say"

you're wrong .. (1)

sshtome (771249) | more than 10 years ago | (#9801004)

I agree alot.

Of course those who invested in microsoft shares didn't do to badly in spite of microsofts unfriendly attitude.

Dutch auction: bids start high and go down (3, Informative)

Chatmag (646500) | more than 10 years ago | (#9800915)

Their opening bid is high, and they will bring the price per share down until there is a buyer. At that point, everyone else will buy shares at that price. I think their price per share will be in the 50-60 Dollar range.

Re:Dutch auction: bids start high and go down (1, Insightful)

Anonymous Coward | more than 10 years ago | (#9800997)

The dutch auction is over. The price per share is already set. Anything that happens after their IPO is just the free market in action.

I'd wait... (2)

pointbeing (701902) | more than 10 years ago | (#9800931)

IANAFinancialAdvisor, but I expect the price to slip below the opening price probably three weeks after the IPO and then settle to a more realistic price. I for one won't be participating in the IPO and have recommended that my friends wait and watch instead.

Go Short Early? (3, Interesting)

grunt107 (739510) | more than 10 years ago | (#9800953)

With a high IPO like that, going 'short' after a couple of weeks might be a good strategy. The market is not stable and many outside influences (energy costs, Iraq setbacks) could easily drop 10% out in a day.

A bigger drop will possibly happen around election time. Whether irrational or not, Democrat wins tend to drop the market initially.

*NOTE* - the above statement is not my political preference, just an observation of how the 2k2 elections were referenced in the same manner

Eh just go to Vegas (0)

Anonymous Coward | more than 10 years ago | (#9801087)

Don't forget to read 23 Reasons Google Can Become a Penny Stock [prweb.com] ... (see also RZ [researchbuzz.org] )...

Price per share isn't that big a deal (5, Informative)

coyote_oww (749758) | more than 10 years ago | (#9800954)

Ultimately, your buying a piece of the company. Higher price per share is perfectly fine if you're getting a bigger piece of the company.

Consider 2 businesses of equal value doing IPO. One creates 1000 shares, and sells them for $10 per share. The other creates 100 shares and sells them for $100 per share. Which is the better deal? Duh! it's the same deal (essentially).

In this case, it appears Google is (or thinks it is) selling "large chunks" of the company. They could offer instead 10 times as many shares, for only $13.50 a piece. Maybe this would be smart. It apparently would suck in a large number of Slashdot readers!

And this crowd is supposed to be math-sci literate! How depressing... I think I'll go off and cry about the poor state of the nation's youth now.

IPO = (5, Funny)

bugsmalli (638337) | more than 10 years ago | (#9800961)

It's Probably Overpriced and it is.

Why so high? (2, Interesting)

RupW (515653) | more than 10 years ago | (#9800962)

Why not sell ten times as many shares at a tenth of the price? Is it deliberate to keep out smallish investors?

Re:Why so high? (0)

Anonymous Coward | more than 10 years ago | (#9801112)

Why would you invest in a company if you can't afford a $100 share? Is there a difference between ten $10 shares and one $100 share (assuming both represent the same equity share)?

Re:Why so high? (1)

gorbachev (512743) | more than 10 years ago | (#9801123)

"Is it deliberate to keep out smallish investors?"

Uh. You only meant to buy less than $100 wort of stock? Good luck getting any ROI on that investment with all the transaction fees.

The minimum investment on any stock, IMHO, should be no less than $2000. Anything less, and the transaction fees are digging too much into the profits to make it a worthwhile investment. The lower the transaction fees, the lower that figure can be, obviously.

For $2000 you can get almost 20 shares. Now, if the stock price was $2000, I would be bitching, too.

Re:Why so high? (1)

artemis67 (93453) | more than 10 years ago | (#9801147)

Possibly. A company tailors its stock to appeal to different segments of the investment market. Just like for the longest time, Microsoft had a high rate of return without paying out any dividends, it was a good buy for wealthy investors who wanted capital gains but didn't want to pay taxes on the dividends.

Re:Why so high? (3, Informative)

Violet Null (452694) | more than 10 years ago | (#9801148)

It was a bidding system. Google said, "Hey, guys, we want to sell 26.4 million shares. How much would you pay for 'em?"

People wrote in bids and the amount they'd buy at that bid. Google took the highest until they'd sold all 26.4 million shares.

So the answer is, because someone was willing to pay that much.

Re:Why so high? (0)

Anonymous Coward | more than 10 years ago | (#9801150)

It doesn't matter if I have 10 shares at $100 each or 100 shares at $10 each, it'd be the same $1000. With that, most investment firms only deal with stocks highter than $10-$15.

Hope it will last (1)

houghi (78078) | more than 10 years ago | (#9800973)

I hope the price will last for those who want to invest in it. Although it should be a fair price what I am afraid will happen is a lot of smaller investors and fans buying at a higher price.

Later these investors might start selling and larger companies will get hold on shares. When that happens Google will have to answer to its shareholders. Shareholders who have no interest in the search engine. They have only interest in the shares and the money.

The shareholders then want more value to the share, wich means there has to be more income generated. This could be done by more advertisement.

Also when I now use google, most of the time I get not wat I am looking for. I get a bunch of sites that just are a copy of newsgroups, something I could get in http://groups.google.com/ [google.com] .

To be it looks as if they are selling out now they still have the possibilaty.

(Now mod me down for saying something agains google)

Savings (1)

borodir (98612) | more than 10 years ago | (#9801005)

Time to start saving that caffeine money to save up enough to buy extra shares.

Euler (1)

Aggrazel (13616) | more than 10 years ago | (#9801025)

So how many shares are they going to have to sell at that price to raise their target of e Billion Dollars?

(scroll down to Humerous) [wikipedia.org]

Question (2, Insightful)

AdamHaun (43173) | more than 10 years ago | (#9801032)

What difference does the price of the stock actually make? Isn't $1000 of Google the same regardless of how it's divided up?

Re:Question (1)

Violet Null (452694) | more than 10 years ago | (#9801124)

1) If the stock pays dividends (Google won't, AFAIK), the more stock you have, the more dividends you get, so 100 shares of stock at $10 would be better than 10 shares of stock at $100.

2) Stock is only worth what you can sell it for. The standard yardstick of what a stock is worth is the price-to-earnings-ratio (P/E); how much money the company earns vs what its stock is worth. The higher this number, the more "overvalued" the company. The S&P has a P/E of ~30 currently (Yahoo has...~82 I believe). In short, the higher the P/E, the less likely the company will make enough money to justify its stock price.

Google Share price (1, Interesting)

hackus (159037) | more than 10 years ago | (#9801039)

Anyone here who purchases google stock at 108 a share is stupid as a rock.

The share price is going to drop like a rock within the first year, almost assuredly.

The Nasdaq is still WAY over valued as well as the big board.

In general stocks are going to burn badly in the next 2-4 years.

If you are considering investing, don't do it in American companies, do it overseas in the far east. Far more growth potential over there to offset any losses you will accumulate in stocks.

I like google, I use it daily. But I think the technology is WAY over hyped.

-Hack

Perfect Plan (1)

Yo Grark (465041) | more than 10 years ago | (#9801041)

Go in High and have all the investors who have been oogling google buy in.

Once the price "adjusts" for the rest of us, (6-8 months?) Geeks will join @ 50-80 and the inital investors get screwed, and the layman will win.

YEAH google you go you!

Yo Grark

Re:Perfect Plan (1)

Violet Null (452694) | more than 10 years ago | (#9801067)

Right. Because it's the investors who get swept away in paying too much for something that they like or have "heard good things about", and the layman who makes the calm, rational, well-informed decisions.

froogle... (5, Funny)

natron 2.0 (615149) | more than 10 years ago | (#9801117)

can i use froogle to find a lower stock price?
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