Was google being serious asking for $108+ a share?
Not only was the price adjusted far down, but so was the total amount of class A shares available, down about 5 million if i remember. Not as popular as you thought Google?
This certainly will be the end of this stupid dutch auction process for any companies in the future. Google has succeded in alienating institutional investors and tried their hardest to rip off individual investors.
The AP seems to be the only one reporting on it so far (that I could find):
From the notice on etrade:
|The initial public offering price for shares of Google's Class A common stock is $85.00 per share. Google and the underwriters have relied upon your bids in setting the initial public offering price, in determining which bids are successful and in allocating you shares. |
And from the notice itself....
|Your brokerage firm will inform you of the number of shares of Google Class A common stock allocated to you and that you are obligated to purchase at settlement, which is expected to occur on August 24, 2004. This information will also be contained in the confirmation being sent to you by your brokerage firm under applicable securities laws. |
It is pathetic that they could not fetch even a buck more than the low end of revised guidance. Let us see what happens when it starts trading tomorrow
|stupid dutch auction process for any companies in the future |
Well that is one way to look at it. Google still got more for their company than they would have using yahoo valuations. I fail to see how this isn't anything but a success for google.
I'd rather the money go to Google than to wall street.
|tried their hardest to rip off individual investors |
I agree. It seems the founders of Google are not only novices when it comes to finances, but they are penny pound FOOOOOLISH.
Looks like Shane was the closest without going over.
What does he win Clark? ;)
It isn't certain that trading will start tomorrow. It is 9:15 PM and I still don't have shares showing in my account.
It is doubtful that the auction was exactly at $85.00. Maybe it was. I have a feeling there was either a discount in there - or more shares being issued - or both - to bring the price to that amount. This is just a thoery.
At $85.00 they have a great market cap and will be inall sort of index funds soon enough. The fact that it went for that much proves the auction process works - no matter how hard people on wall street didn't want it to.
That a stock is sold for what it is worth is somehow ripping off people is beyond me.
I would be very surprised to not see this happen tomorrow - at this point I think Google just wants to see it happen already and I would be very surprised to see a Friday/Summer IPO.
Also - another article here from the Financial Times - [news.ft.com...]
[added} opinions [/added]
I don't understand why people will call this an intention to rip-off anyone. The whole process was transparent enough considering and there were certainly enough warnings.
Now I have to agree with the fact that it wasn't executed as well as it should be, but that is another story and the one that suffers the most is the company itself and the existing shareholders not those that are coming in right now.
|I think Google just wants to see it happen already |
I am not sure if it really is up to them. Even if they do want it to happen - their may be problems beyond their control in allocating the shares and the like.
I read the samething about etrade and the 24 hours, but I don't think that would stop them. They have had conflicting statements about this issue - so I am not sure.
Oh well - still no shares in my account...
This was stupid greed, not intelligent greed.
yeah Google got all the bucks instead of the Wall street guys, but now there is little immediate upside left in the stock.
I am adding this to my list of short candidates.
I just re-read on etrade, and they say money needs to be available at settlement, which Google says is August 24th. They must have changed it as I can't find any mention of 24 hours on the site.
I saw the same thing you did - they have been changing things - same stuff with the IPO shares on margin.
You aren't imagining things.
|Can I purchase shares in a public offering on margin? When do I need to have funds on deposit in my account to participate in an IPO? |
Customers may not purchase shares in an IPO on margin. After effectiveness, you should have sufficient funds in your account to cover the total value of your bids.
|After google's registration statement is declared effective by the SEC, you must have sufficient cash and/or equivalent value of marginable securities in your account to cover the sum of all your bids or your bids may be canceled |
Which is on the print out of when I placed one of my bids.
My purchasing power was equal to my "For cash securities/options" buying power. I managed my bids to keep well within that number.
This purchasing power number was in the page where you entered your bids.
/uses Etrade too.
I have a feeling that a few class action lawsuits on behalf of investors is a possibility.
|Oh well - still no shares in my account... |
Most of the allocations per my experience are informed mid-night to early morning hours. The IPO stock is not likely to start trading at the opening bell too. Usually they start trading around 2 PM EST (11 PST).
I think in case of EBay, I believe that ETRADE informed me the allocation in the morning around 9 AM PST and the stock started trading at 11 AM PST.
I'd rather the money go to Google than to wall street.
But then won't wall street be less enthused about IPOs and the next guy who wants to take his company public will have a harder time?
I don't think so. Most of the won't have the clout that google did, but places like WR Hambrecht + Co that pioneered the OpenIPO concept are more likely to be able to handle small firms once they have proven the concept works with companies as big as google.
No company has EVER had so much "negative press" and I put it in quotes - as the stories were taken out of context and exagerrated as Google has before an IPO.
Just do a search on google news for google ipo and you get:
Discount Google IPO cleared - Australian IT
The Amazing Shrinking Google IPO - CBS News
Online Betting Service Predicts Another Google IPO Price Drop
Remember That Google IPO? It Didn't Happen.
Hedge funds may short Google IPO
Google IPO: Too Clever by Half
Google IPO Under Threat Due to Shortage of Bids
And except for one they are all just from today.
If a company with millions of shares can get billions for their IPO using the auction process - smaller companies with much less certainly should be able too.
|If a company with millions of shares can get billions for their IPO using the auction process - smaller companies with much less certainly should be able too. |
No small (especially a B2B) company will have a billionth of name recognition as Google does. What, if any proved in case of GOOG, is by no means applicable to other company IPOs.
When you stated the negative press from today - it was mostly because of how GOOG's price was adjusted down. Other than that, GOOG got a great coverage, anticipation including a PLAYBOY FLAMBOYANCE by its founders (especially of Sergey whose quotes are definitely questionable in light of then pending IPO)
The coverage has been poor ever since google announced the "high price".
The playboy thing was played out like google was a bunch of crooks.
The auction format is here to stay. As long as the google IPO isn't disaster in the coming days.
Companies have no reason to pay 7% when they can pay 3%. That is a big difference. 10 out of 16 IPOS priced below their range so far this month.
Google was the biggest one so far to use this format - and once people realize it doesn't lead to disaster - then they will use it.
Just my 2 cents. If it was my company - I would take it public using this format. As an investor - I would hesitate to buy shares in a company that was so willing to waste money.
|Companies have no reason to pay 7% when they can pay 3%. That is a big difference |
If the commissions are an issue, each company could negotiate (especially GOOG) the pay terms. I think it was the naive and high handedness of folks at GOOG that converted a greatly anticipated IPO to almost an IPO that no body is interested.
People WERE interested - this is why it went for MORE than yahoo on a p/e valuation basis.
People that realized they were unlikely to get a one day pop were less interested. They aren't in the interest in the long term viability of a company.
|The playboy thing was played out like google was a bunch of crooks |
deservedly so .. don't get the impression that I hate Google .. contrary to that I love Google. But when it comes to GOOG, I am on the other end!
Well I guess we will just have to disagree. The fact that google might have in "violation" of a "quiet period" that has never been defined nor the SEC seems to thing serves a useful purpose in this day in age - doesn't make me think they are crooks - nor the other people that bid on their shares.
Google has their problems, but almost everything they have done during this process would be IMHO welcome changes on wall street. Their prospectus was according to some the most innovative that had ever been filed in history. I'd like to see more companies like google - that for example expense stock options - unlike yahoo.
You don't see many articles out there talking about that. And how that increases google's valuation compared to other stocks that don't. Just talk about a playboy article - that disclosed nothing important, some stock that was issued improperly, and a share price that is "too high" and then slashed.
The articles that really went into detail about this IPO and the good and bad that go along with the process were few and far between.
In the end - I guess all that matters will be if google goes up in price. If it goes up - the process will be considered a success - while if it tanks - a failure. While it really has nothing to do with the underlying advantages and disadvantages of the Dutch Auction/ OpenIPO format.
>>Google was the biggest one so far to use this format<<
And they did it with 99% of Wall Street "doing everything in their power to torpedo it" -according to a CNBC Wall Street guru this afternoon.
Let's put things in perspective here...$20+ billion via an AUCTION is a monumental accomplishment in my book.
As far as the $108 --> $85...anyone here ever bought or sold a used car...? ;))
Google has done everything they could to be above board throughout this entire process. Did anyone even read the P-boy interview? Not much too peel from that if you are a prospective investor.
I am not naive but I take them at their word when they say "do no evil". It is quaint and corny but these guys still live in apartments and drive Yugos or the equivalent. How could they have done this differently? They could have just let the Wall Street sharks run the usual IPO which would definately have pulled in the small investor only to leave them hung out when the crooks flipped their shares minutes after the first moment of trading.
Kudos to a company who never wanted to go out. They were forced to go public because they crossed thresholds that required exposure of their data.
The IPO was forced upon them by their own successes.
The evil man himself was waiting like a shark to see those numbers and plot how he could take a large bite out of the side of Google.
I hope the trading goes steady. I do not intend to sell the shares I am in on....ever!
P/E of 120+?
Within a year this stock is gonna drop like a stone.
Shares are still not appearing in my etrade portfolio, but I see under "bid history" that some shares have been allocated. according to this - I have ~74% of the shares I should have "won". It appears likely that google has "discounted" the shares somewhat, and is therefore giving people a pro rated amount of shares they bid on.
I assume this could change, but my best guess is the stock would have gone for a little bit more money in order to execute at the maximum price that all the shares bid on could have been filled.
Can anyone else confirm if they are seeing something similar?
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