Forum Moderators: goodroi
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When Google and Larry sold their 1 millions shared, how much money goes into their individual pocket and how much goes into the company pocket? Since IPO is raising fund, company shall have some money. But Google and Larry are owner of the shares, shouldn't they get all the capital gain?
I am confused.
When Google and Larry sold their 1 millions shared, how much money goes into their individual pocket and how much goes into the company pocket? Since IPO is raising fund, company shall have some money. But Google and Larry are owner of the shares, shouldn't they get all the capital gain?
IPO has two components -
1. New stocks issued and sold to public that will infuse capital in the company but will dilute current stockholders' ownerships since there are new members to share the pie. This money is company's and all the stockholders collectively own it. Larry cannot use this for personal purpose.
2. Current stockholders selling part or all of their current holdings to the public. This money will go to their pockets. This will further dilute their ownerships. For example, Larry will get all the money from disposal of his 1 million shares.
Google's only realy security is in its brand image, which of all things will be difficult to maintain once they are public.
Search explosion was in 2003. What will be the driver in 2005? If it's brand advertising, search engines don't have what brand marketers want: stickiness.
According to comScore, the average time spent on Yahoo is 4.4 hours in a month compared to 22 minutes for Google. Time Warner's (TWX: news, chart, profile) AOL seems to keep users on its properties for 6 hours in a month, on average
What do investors want? Stickiness to click on an ad IMO..
I also do not think it will be easy for Yahoo to capture any of Google's 22 minutes outside the Americas..
First of all, there is a huge overhang of shares. Google is making 10 percent of its company available to shareholders. That means for every 1 share owned, there are nine waiting to be sold down the road.
Any SEC filings on what "time freeze" existing shareholders have on further selling their shares?
The euphoria over Google's IPO is likely to be tempered by news yesterday of an unexpected slowdown in the company's huge growth rate in recent months.The company blamed the slowdown on seasonal factors, suggesting its core business of selling advertising linked to search engine results was maturing more quickly than many had thought.
I'm confused. If it is an auction, then what is the price range for? Is that a just a target price that Google hopes to get or is it the minimum they will take for shares - ie if people decide Google isn't worth that and don't bid that much, then the shares just don't sell unless Google decides to take less?
I was told by a E*Trade rep that they are not doing the dutch auction thing anymore..
I am confused too.. I will say I have Google to thank because I am learning a lot about the IPO process from the confusion :)
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---77 PE
Outrageous. I could see a 30 ---maybe. Let me rephrase that..77 is not characteristic of a stock that offers the numbers above in that industry.
I think there will be a lot of shorting of this stock.
Shorting won't matter to the current IPO - they will still get their money. The shares might be worth less later on, but it will still be a multi - billion dollar company no matter what.
Aftermarket shareholders might get hurt - but as long as shares go for more than 35 cents - most insiders will profit. Or I should say the average insider will profit.
the average time spent on Yahoo is 4.4 hours in a month compared to 22 minutes for Google
Seriously though, I don't think "the street" really understands Google's business. In terms of minutes for the search business, the less time a user is on the site the more effective the product. You can't compare these two companies this way and have it mean anything. Personally I would value Google higher than Yahoo. Google seems to be building a business, while Yahoo is after a quick buck. That being said, most people on "the street" only are after a quick buck.
I heard yesterday on CNBC "the search market is shrinking anyway...just ask AskJeeves." That's like saying there is no market for cars in the US, just ask Alfa Romero, Renault, or Yugo.
Google says they are in this for the long term, quick buck be damned. It will be interesting to read through this thread in a few years, after seeing how things shake out.
Of course, time spent on a property is a lousy metric, and doesn't equate to attention paid to advertising. If I spend a 1/2 hour writing a long e-mail, I don't scroll-up to view the banner ad.
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That will be followed by about 175 million shares released in another three months.
Wow! Reminds me of some past experiences. I think waiting for six months will pay off nicely.
[Note: I am quoting figures from memory; could be wrong by a few million shares or a few billion dollars give or take.]
So a cynic might say there past goodwill and lack of monetization of their SERPs may have been a ruse ultimately for IPO Greed. It has been a great ride, they have made the SEO and themselves alot of money. Their pious original aims are surely imcompatiable with public shareholding profiteering aims. Will they not just be like Yahoo soon? Wont that goodwill evaporate on both sides consquently?
Personally I wouldnt entertain paying even a fraction of this for their shares as a long term price goal. Why? Because just like my business based on a SE it is ultimately built on a house of cards.
But... short term greed may result in profit with these shares, remember the foolery and unjustified crazy valuations prior to March 2000 and yahoo's listed price. Be careful watch closely..get out at any sign of trouble and hold onto any potential profit.
There's a number of things that Google is doing better than anyone else. Hiring brilliant people, giving them 20% of their time to work on projects of personal interest, creating an outstanding work environment- it's no wonder they can create better things than Microsoft. Their understanding of usability- as evidenced by the simplicity of their interfaces- is exceptional.
One of the more technically impressive things is how they are managing their infrastructure. They likely have over 100,000 servers- and they're doing a damn good job of maintaining that many low-cost machines.
Google has a strong brand, marketing, usability and technical mojo. And they're not just a search engine: they're a technology company. They are spending massive amounts of money on R&D and have a decent track record of bringing some of those innovations to market. Orkut, Adsense and GoogleNews were personal projects. Yeah, some don't work out... and some make boatloads of money.
As to Microsoft's competition, I wouldn't be surprised to see a GoogleFox browser based on Firefox 1.0. MSFT has the desktop, but Google has people's attention. With gmail, Google might also take a chunk out of Yahoo.
I'll wait it out, until the short-sellers and the second wave of stock sales bring the prices down a bit. But it might not be as crazy a bet as some people think.
