Google's IPO

[Timber Loftis]

Company's statement:
https://www.ipo.google.com/press-rel...0040818-1.html

SEC Filing:
http://www.sec.gov/Archives/edgar/da...42742/ds1a.htm
(scroll down to read an interesting interview with Playboy, Brin and Page.)

Let's talk about Wall Street and the oligopolies that run this country. If you try to buy Google stock, you would find that no bank or investment firm wants to help -- you have to go to an Agent. If you find an agent (I know of only one) willing to sell you the stock, you will find that they have to walk you through a 20+ page qualification sheet to ensure you are a qualified investor. Let me mention the big hurdle that would make most of us stumble: in order to buy stock in Google's IPO, you need to have a net worth of $1.2million OR make $200,000 a year or more ($300,000 or more for a couple).

Get it? The benefits of Wall Street are for that 0.5% in this country that owns everything already.

Thank you, SEC, for passing rules to "protect" us all from the evils of IPOs. Thanks a frikkin lot.

[Night Stalker]

It's the same thing for Hedge Funds. I've been delving into this complex world of investing a bit lately .... the rules really do favor the already rich. Some places require a minimum $50,000 to start an account!!! Others $200,000!!!! [img]graemlins/wow.gif[/img]

I would love to see the floor of the CBoT some time though.

[Timber Loftis]

Well, whenever you're out this way. You just have to promise at least one Ferris Bueller impersonation.

[ 08-18-2004, 02:43 PM: Message edited by: Timber Loftis ]

[Aerich]

Thanks for the link, Timber. I learned a lot about Google in the few minutes it took to read the interview. I may never be able to buy its stock, but by golly at least I can understand a bit about how it works and how it is run.

Brin and Page come across well. Here's hoping they never lose their control of Google.

[Timber Loftis]

Note that the interview with Playboy was their 1st SEC violation -- before even going public. [img]graemlins/biglaugh.gif[/img]

[ 08-18-2004, 02:42 PM: Message edited by: Timber Loftis ]

[Night Stalker]

Well, I have more than a year (almost 2) before I can return to the world.

In the mean time I'm putting a lot of faith in companies like DHB Industries, Coppertone, and Black Hawk. And pretty any other company with a GSA contract!

Though I must say that Chi-town is one of my favorite towns. Got to spend time there on business .... damn 7 years ago!!!

[ 08-18-2004, 02:54 PM: Message edited by: Night Stalker ]

[Timber Loftis]

Thanks SEC!! Thanks for saving all us non-rich Americans from the horrors of investing in an IPO.

Google jumped 25% on the opening day. [img]graemlins/wow.gif[/img] ONE DAY. [img]graemlins/wow.gif[/img] All those Fat Cat wankers who bought the stock made a 25% return on their investment in 1 day. Remember, only those who made more than $200,000 ($300,000 for a couple) per annum or had a net worth of $1.2 million could even buy the IPO.

Smoke that in your pipe the next time you go to a bank and ask about CD rates versus money market rates.

The question is, when will prolitariat revolt? Ever?
____________________________________________
August 19, 2004
Shares of Google Jump as It Debuts on Nasdaq Exchange
By ANDREW ROSS SORKIN
and GARY RIVLIN

Despite weeks of voluble skepticism among investors, Google's stock jumped about 18 percent to $100.01 a share when it debuted today on the Nasdaq exchange. Google had slashed the price and number of shares in its offering at the 11th hour on Wednesday, as it appeared that demand would be weaker than expected.

But by lowering the initial price to $85 a share, down from its original estimated price range of $107 to $135 a share, Google and its underwriters may have helped spur demand for the stock sale this morning.

Still, the quick jump in Google's stock may not necessarily be considered a success in the eyes of the company's management, which had set up an unorthodox auction process to initially distribute its shares. The process was supposed to minimize the potential for the stock to "pop" in its first days of trading, the way the stock of so many dot-com companies did in the late 1990's.

The stock offering had a small hiccup right before trading officially began at 11:55 a.m. as two trades were made at 11:39 a.m., before Nasdaq had given the green light. Nasdaq officials said the trades "should not have gone," Reuters reported.

Larry E. Page, 31, one of Google's co-founders, rang the opening bell at Nasdaq's "Market Site" in New York's Times Square. He refused to take questions from reporters.

When Google, operator of the Internet's most popular search service, announced its stock offering in the spring, many investors hoped it might mean a revival in the market for new technology stocks — a market all but dormant since the dot-com collapse of 2000. But a series of missteps and miscalculations by Google in the last month, as well as a big decline in technology stocks lately, turned many investors into skeptics and led to the lower initial offering price on Wednesday.

The pared-down offering, which cut the number of shares to 19.6 million from 25.7 million, will raise $1.66 billion for Google, its founders and some of its early investors. That places the company's total worth at $23 billion. Only three weeks ago, the company and its bankers had valued the company as high as $36 billion and said they hoped to raise as much $3.6 billion.

Two of Google's big early investors, the storied Silicon Valley venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital, decided to withdraw their combined 4.5 million shares from the auction early Wednesday, betting they can get a better price at some point in the future.

"Google should have repriced this thing a couple of weeks ago," said Andrew M. Schroepfer, president of Tier1 Research, a financial research firm specializing in technology. "What they found out from the marketplace is that they need to prove themselves before they start trading at the kind of multiple they were looking for."

The lower-than-expected price per share may be disappointing to stakeholders in Google, including the founders, Mr. Page and Sergey Brin, who started the company in 1998 while graduate students at Stanford University at that time. But Silicon Valley financiers dismissed any suggestion that a more modestly priced Google reflected badly on the technology industry.

"When you can get a brand new stock public at over a $20 billion valuation, there's nothing wrong with that market," said Sanford Robertson, a founding partner at the investment firm Francisco Partners, based in Menlo Park, Calif., and a co-founder and former chairman of the investment bank, Robertson, Stephens & Company.

"I think the story here is the company finally got down to the right place, price-wise," Mr. Robertson said. "This is still a terrific valuation. This is still a very, very big price."

Michael Moe, the chief executive of ThinkEquity Partners, a boutique investment bank based in San Francisco, took a similar view: "Even at $85 a share, this is a remarkable win for Google. Google is going to raise $1.8 billion, which is a giant win for a company that didn't exist six years ago."

The decision to scale back the offering was made late Tuesday night after a presentation in which the underwriters, Morgan Stanley and Credit Suisse First Boston, briefed Google's executives and chief investors about the status of the auction. It was the bankers who recommended repricing the deal, according to two executives briefed on the discussion.

A flurry of conference calls ensued, involving Google's founders and its chief executive, Eric Schmidt; the bankers, and principals at Kleiner Perkins and Sequoia. The calls, according to the two executives briefed on them, included heated exchanges in which the various parties blamed one another for miscalculating the demand for the offering.

The problem-plagued offering raises questions about whether Google erred in deciding to flout Wall Street's conventional way of taking a company public: investment banks underwrite the stock, set the price and distribute many of the shares to chosen clients, friends and family members.

Google, whose Securities and Exchange Commission filings pledged a "Don't be evil" philosophy, said its so-called Dutch auction of shares online would democratize the distribution of its stock, while achieving the best price for the company's stakeholders. In a Dutch auction, all bidders end up paying the same price — the highest price that assures that all shares will be sold.

"It seemed clear to many from the start that the Dutch auction process for such a high-profile, consumer-oriented company like Google — with an unseasoned management team — was a recipe for failure," said Hulus Alpay, who counsels companies about to go public as the head of investor relations at Makovsky & Company, an investor relations and public relations firm.

Google's executives, bound by the S.E.C.'s "quiet period" rules for companies about to go public, have been unable to comment.

To at least some, the company is finally being priced at a value that more accurately reflects its true value.

"The real story of what happened here is the deal is finally being priced where the bankers would have put it had they been in charge of this deal from the beginning," said one investment banker, who owns a small slice of Google through his stake in one of the venture capital funds that was an early Google investor. He insisted on not being identified because he has investment banking colleagues involved in the deal.

Despite Google's stated democratic ideals, some investors studying the offering documents grew wary. Google is issuing two classes of stock, so that the founders can retain far more voting control — giving the public shareholders a very limited say in the way the company is run — than is often the case when companies are publicly traded in the stock market. Some media companies, though, including The New York Times Company, use such a two-tier stock structure.

Many investors had also grown leery of the auction's complexities. Many of the 28 brokerage firms underwriting it seemed to have different policies about placing bids.

The offering has been further tarnished by brushes with the S.E.C. On Wednesday, Google disclosed that the S.E.C. had requested additional information about an interview the founders gave to Playboy magazine in the spring shortly before the company's public filing. The interview may have violated securities laws because it included discussion of company information not included in the offering prospectus.

On Monday, the company said informal state and federal inquiries were being conducted into the way Google distributed stock to employees in the years before the offering.

[ 08-19-2004, 03:20 PM: Message edited by: Timber Loftis ]

[Aerich]

Their company motto is "Don't be evil"?? Get 'em, GET 'EM!! We can't have this happening!!