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Google is considering holding a massive online auction of shares early next year in an initial public offering that investment bankers predict could value the internet search-engine company at more than $15bn.An electronic auction would be designed to prevent a recurrence of the sort of financial scandals that have engulfed Wall Street since the collapse of the dotcom bubble, according to a person close to the company.
However, investment bankers warned that a pure online auction would risk setting an unrealistically high price for Google's shares, since there would not be enough stock available to meet the massive demand from private investors captivated by the prospect of a new dotcom gold-rush."They could get a $100bn" stock market value, said one person involved.
Meaning it goes into Google's pockets instead of to the usual suits.
While everyone's blabbering about "out of the box" thinking Google is once again showing that for them, there is no box.
[edited by: martinibuster at 10:19 pm (utc) on Oct. 23, 2003]
Google is once again showing that for them, there is no box.
Interesting that it's now the corporate execs that this applies to.
However, investment bankers warned that a pure online auction would risk setting an unrealistically high price for Google's shares, since there would not be enough stock available to meet the massive demand from private investors captivated by the prospect of a new dotcom gold-rush.
Shorters will have a hey day if that happens.
However, investment bankers warned that a pure online auction would risk setting an unrealistically high price for Google's shares, since there would not be enough stock available to meet the massive demand from private investors captivated by the prospect of a new dotcom gold-rush.
Translation: The investment banker's fat cat clients can't buy the IPO shares at unrealistically low prices and then sell them to the rest of us on the open market for a hefty one-day profit.
- An online IPO is a brilliant match for Google. They save the 8% (?) brokerage fee to have a bank take them out, and with one fell swoop, transform millions of Google users into millions of Google owners.
- They should do this next week. From reading and participating in these boards and working in the industry, Google is (mildly?) broken. SEO's, WebMasters, Bloggers - are combining to manipulate Googles search results. We've all seen the examples. It won't be long until this news reaches the public, the public overreacts, and Google's projected market cap gets decimated. I have no doubt that the sudden IPO mention is linked to growing issues with PR and the like. Raising $20B would allow Google to throw a lot of cash at their issues, and with the brains that they have over there, most likely buy some more time.
These folks have been drooling at the prospects of taking Google public for a long time. No doubt some of them are lucky if they were sitting down when they heard the news google may go public without their "help" and "guidance".
It's downright awful how much pre-IPO company owners often get short changed by the investment banking/IPO crowd who do their IPOs. Just to cite one example: all the quick in and out the same day money made by "buddies" of the investment bankers who are doing the IPO selling large blocks of the IPO stock at below **current** market price to their "buddies" who then immediately flip the stock -- so those same "buddies" will let them make some quick cash on the same kind of sweatheart deal via an IPO stock allotment on the next IPO their buddies do. That money should go to the companies whose stock is being IPO'd off.
These sweatheart deals between investment banking buddies can run into the hundreds of thousands and even millions; and that's for *each* of several "buddies" per IPO. That's a lot of money that could go into capitalizing future business growth of the company instead of "bribes in advance" for a return favor paid back to them when their buddies do *their* next IPO and allow them to flip that stock on the IPO day of their buddies stock. They get their fees; that's enough, IMO.
Good for Google. I hope they make a mint for themselves.
And if the stock fluctuates, so what. Any expressed worries by the same type of hypesters that don't seem to worry about the triple digit P/E ratios of stocks they or their firms suggest clients buy is nothing but self serving verbal puke IMNSHO.
Go Google!
P.S. I love business....but hate the parasites that sap the marrow from its bones.....like the investment banking/IPO crowd on wall street. Blah.
</rant>
[edited by: midwestguy at 11:34 pm (utc) on Oct. 23, 2003]
Those guys have not only brain, they are realy smart and totally different. That what I like from google.
Maybe they will do it in lots on EBAY - that would be mental!
For sure the demand will outstrip the supply fuelling excessive speculation. As a consequence bulls will run on this, inflating the share price out of reach of the common person.
Even if they do get allotments it will be at an artifically high price(which probably will defeat the googles image of probity & justness).
Some out of the box thinking required on this one as well. How to manage the allotment to small investors & still maximise the inflow.
Go Go Google.....
Has a line at the very end of their webpage that says:
"This site is for U.S. investors only."
Whether Google would use their OpenIPO system - or evn consider this idea is unknown. You still might be able to get shares as even though their site says that - there is a space for country in the app. You can also participate through other brokers that have agreements with WR Hambrecht.
If Google were to IPO in this manner, I think they would want to make it as inclusive as possible. However, this might be a problem due to legal reasons, SEC, and so on.
If it is auctioned - keep in mind that everyone that wants some will get somme and there will be very little chance - and it would be just chance - of a big one day profit - as all the demand would be covered by auction.
If you just want google shares - you should be able to but them on the open market (assuming you have access to NASDAQ/NYSE/AMEX) the same day they go public.
EquityMind
In the dot com days companies used overinflated shares to buy other companies with overinflated market values.
Today, cash is king in a market where there still might be a few buyouts to come. If they raise this kind of money they ought to hire Warren Buffet (I suspect he's already in on the action) to guide them about investing the proceeds.
"Diversify" is what everyone says about their online businesses. With that kind of cash in hand watch them go on a very calculated buying spree - not all search.
Let's see: Buy Dow Jones, buy SAS, use some to set up an alternative auction to EBay, enter streaming media, enter online interactive games, ....
Sounds very good!
Does anyone know of this kind of approach to an IPO has been tried before anywhere?
Yes they have:
[openipo.com...]
Is one - there is some useful info on that site if you look around. Should help answer some questions as to how the process might work.
Just to reiterate:
Google hasn't said anything official about an IPO happening anytime in the future.
Even if they did - we don't know they would use an auction process.
Even if they did - we don't know they would use OpenIPO.
I will definitely short a few thousand shares
As they will probably get overrated this seems to be a good idea.
However, investment bankers warned that a pure online auction would risk setting an unrealistically high price for Google's shares, since there would not be enough stock available to meet the massive demand from private investors captivated by the prospect of a new dotcom gold-rush.
I translate that as: "Don't cut us out or you might make too much money."
I think Google going the auction route would be great. I really like the idea of creating an alternate IPO channel, and this would add legitimacy to it.
You've gotta love hearing the investment bankers squeal about the price the company gets being too high ("We and our favored customers are supposed to get that money!"), and there being no liquidity in the aftermarket for Google stock. Ha! I bet their limo phones were working overtime when this story broke...
slashdot.org/article.pl?sid=03/10/23/2349217
I will definitely short a few thousand shares when Google hits ~$100 share or so.
YHOO: 119.52
IACI: 408.91
AMZN: negative earnings
