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CNBC seems to be suggesting thrusday.
I don't see how they could get it done in time for tomorrow.
I just revised my bids. I have seen articles from "they don't have enogh bids at any price" (they do now - ok etrade would only let me bid for 10,000 shares.) to "they will sell them all at the low end of their range".
I even see some people suggesting things that I don't think are even legal or possible.
For the biggest talked about IPO in history - I think someone besides me on here has submitted a bid. I doubt I will get many shares - as the vast marority of my bids are woutside the range where they seem to want them.
I'd just hate to see them all go for a low price and not get any shares. I don't personally thing they will go for a low price - as I think most of the talk recently is part of wall street's fellings getting hurt as the world realizes that 90% of their services are not needed.
It seemed a waste not to bid something. Ok I bid more than a penny, but submitted bids below what I thought I could get them for. If they sell for that much - I would be suprised. It didn't end up being 10,000 shares, but I might go back in and bid those remaining at .02 a piece...
It is after 4:00 pm - and as far as I can tell - the auction is still on.
Nothing wrong with a hundred shares - that is how much one of my first two bids was for. I seriously doubt most of my bids will be accepted or that I will end up with more than 100 shares.
If you get 100 shares at ~$100 - you are paying for $10,000 worth of shares. If your commissions is less than $20.00 - you are paying less money than you would be for almost any mutual fund shares out there.
When people ask how much they should invest in a stock - I look at how much they could "save" if any on commissions if they went with mutual funds. If you assume the stock market is random (which I do more or less) - then as long as you aren't paying too much in commissions - you are doing ok. Of course if google nose dives - that will be a different story - and you don't get any of the diversification benefits of having multiple stocks with a mutual fund.
Some of the stories out there were talking about how ~$100.00 with a 5 share minimum freezes out the small investor. This is untrue. Anyone buying only $500.00 in stock is probably paying $13 - 20.00 in commissions. This works out to be 2.6 - 4 % of the money invested. That is a huge amount.
There is nothing wrong if someone WANTS to do this, but any advisor should be more concerned about the high commission their client is paying than a five share limit google is imposing. Some mutual funds have loads of 5.5 %. So compared to those - it isn't highway robbery, but compared to a low cost index fund it is.
With the "winners curse" that this auction process involves - I am very interested to see how it all plays out.
[edited by: Chris_R at 8:23 pm (utc) on Aug. 17, 2004]
Most bids are well above what I think the shares should sell for, but below what they probably will. I'm basing the total amount I bid on the shares losing 50% of their value on day 1, and being able to make up that difference with 2 weeks of affiliate revenue... that google will hopefully supply ;)
Due to the lowered oil prices today and the good run on the market the last few days I bumped up my thresholds today to something less realistic and more in tune with getting some shares. (now I have to go back and add a $0.04 to each ;) )
A small part of me says that this is foolish .... all the conventional wisdom says this thing will tank. But the gambler in me says that when so many people are talking about shorting the stock, that's the time to buy. All these institutional investors are not going to be left holding stock that dropped 50% the first day. It may eventually drop, but I don't think the first day. I just wish I were more of a gambler ...
I just wish I were more of a gambler ...
Nah - trust me. I know gambling is a losing proposition, and I still do it. I can tell you exactly how much I am losing on average on every spin of roulette - and why it costs me half as much at the hard rock casino in london as it does at the stardust in vegas.
And it doesn't stop me.
Go out and get a "Random Walk Down Wallstreet" and put a damper on any gambling ideas in the stock market before they get started...
Anyway - I look at it this way...
The Winners Curse
As explained in the google prospectus this is:
The auction process for our initial public offering may result in a phenomenon known as the “winner’s curse.” At the conclusion of the auction, bidders that receive allocations of shares in this offering (successful bidders) may infer that there is little incremental demand for our shares above or equal to the initial public offering price. As a result, successful bidders may conclude that they paid too much for our shares and could seek to immediately sell their shares to limit their losses should our stock price decline. In this situation, other investors that did not submit successful bids may wait for this selling to be completed, resulting in reduced demand for our Class A common stock in the public market and a significant decline in our stock price. Therefore, we caution investors that submitting successful bids and receiving allocations may be followed by a significant decline in the value of their investment in our Class A common stock shortly after our offering.
The stock price will only decline if those investors sell their shares. There is:
1) Only 9% of this comany available to the public. If you want some of google - you need some of these shares.
2) Google has a huge foreign market. I have no doubt that many people in other countries will be buying this stock on the first day of trading. 29 out of 30 people in the world were not able to buy this stock in IPO as the weren't a US citizen.
3) Many mutual tech and index funds will NEED to buy these shares. Many of them are most likely waiting for day one to see what happens.
So in short - I think the shares will be priced close to demand - and thing will equal out fairly well. Some people will sell on the first day, but you will have first day buyers as well. As long as nothing dramatic happens - then nothing dramatic will happen :)
And there is always the chance that google will give a discount to shareholders. A 5% discount could cost them 150 Million Dollars in the short term, but some people see a benefit in the long term. I don't know if I'd want to give up a sure $150,000,000 if I were them though...