GOOG: Google

http://finance.myway.com/ht/nw/bus/20040...

Top 22. Aug 5, 2004 11:05 PM

» radiodude - Google delay of IPO...

oops! Why am I not impressed by the google IPO ---- Oh, I almost forgot, I don't buy individual stocks any longer.

Google May Delay Its IPO by About a Week

Thursday August 5, 10:17 PM EDT

By Reed Stevenson

SEATTLE (Reuters) - Google Inc. may delay its highly anticipated $3.3 billion IPO by about a week as the Web's No. 1 search engine waits for more fund managers to bid on the shares, a source familiar with the offering said on Thursday.

The delay came after Google spooked investors by disclosing it may have illegally issued shares worth as much as $3.1 billion to current and former employees.

-- posted by radiodude

Top 23. Aug 12, 2004 10:57 AM

» Normxxx - Gambling on Google

Gambling on Google: Slate bids on Wall Street's hottest IPO.

By Henry Blodget | Monday, Aug. 2, 2004, at 2:58 PM PT

The Google IPO auction process, the market's spectacle du jour, has begun. Should we join in the frenzy? Or just watch?

For reasons that will soon be clear, participating in the Google IPO auction is gambling, not investing, and the most likely outcome is a waste of money and time. If we were acting rationally, we would just decide to invest in Google (or not) after the stock started trading, when we knew what we could buy it for, rather than now, when we have to guess. Because one goal of the auction is to reduce or eliminate the first-day pop, "winning" the auction won't likely lead to the instant bonanza that usually makes people salivate about getting IPO shares. But, then again, other forms of entertainment—dinner and a show, say, or a visit to the circus—also waste money and time, and they're wildly popular.

Because playing the Google game is probably imprudent and irrational, those interested in Wall Street self-defense shouldn't play it. But for those approaching the Google auction in the same blithe spirit that they might approach a fancy dinner, participating could be fun. Either way, it makes sense to understand a little bit about the game.

In auction parlance, Google's IPO will be a "sealed-bid, uniform-price" auction, which has different bidding incentives than other types of auctions. (For a description of how various auctions work, click here. Go ahead, click. It's interesting.) Google intends to eliminate bids it considers "speculative" and then price the IPO at or near the auction clearing price, the level at which there is enough demand to sell the shares. To "win" shares, we need to bid below the speculative price and at or above the IPO price.

Many analysts tout IPO auctions as the best thing to happen to the stock market since the reform of bubble-era research practices (see disclosure). The goals of the auction mechanism are worthy enough. It's supposed to increase fairness (and reduce cronyism) by distributing the shares to those willing to pay the most for them (as opposed to, say, those willing to kick back the biggest commissions to the underwriter), and it's supposed to get the company the highest possible price by reducing or eliminating the IPO discount.

However, it's important to remember a few things. First, auctions are not a new IPO mechanism. They have been tried in numerous countries over the last 25 years (including the United States) and, in almost all cases, have been discarded in favor of the traditional American IPO method. Second, what's good for the company (high price) is often bad for investors (less upside). Third, those willing to pay the most for shares may not be those best qualified to evaluate their worth. Fourth, and relatedly, auctions are generally not better for individual investors (i.e., us). When individuals "win" auctions (e.g., get stock), it is often because they outbid professional investors who have better information and/or a better sense of value. In such cases, the future stock performance is usually lousy, and the "winners" end up losing.

There are multiple ways we can lose the Google game, and only one way we can win. We can lose—money, time, and/or potential profits—by:

1) bidding within the "winner" range, getting shares, and having the stock drop (likely);

2) bidding so high that our bid is dismissed as "speculative," not getting shares, and having the stock rise (less likely); or,

3) underbidding, not getting shares, and having the stock rise (less likely)

The only way we can win, meanwhile, is if we bid in the "winner" range but below the price at which the stock trades in the aftermarket (highly unlikely). One reason IPO auctions have essentially been abandoned worldwide is that these odds stink. (Good thing we're not acting rationally.)

For the sake of balance, it bears noting that we will have the best odds of winning (making money, not just getting shares) if most potential bidders are so terrified of losing that they don't bid: This will allow us to aim low, get stock, and then benefit when the great prudent majority—which refrained from bidding on the auction—piles on in the aftermarket. To maximize our chances, therefore, we should preach (preferably on national television) that participating in the auction is a terrible idea. In the months since Google announced the auction, scores of experts have done this. Many of them are probably now formulating bids.

In formulating our own bids, we need to think through several issues:

1) what price the market will place on Google shares (which may or may not bear a resemblance to the company's "intrinsic value");

2) what price other IPO-bidders will conclude the market will place on Google shares (a function of others' perceptions of others' perceptions); and,

3) what price other IPO-bidders will bid in light of the foregoing (how others will "play" their perceptions of others' perceptions)

On the first question, in recent days, many commentators have offered assessments of Google's value. Google, for example, has set an initial IPO price range of $108 to $135, valuing the company between about $31 billion and $39 billion (including options, etc.), and an analyst at American Technology Research, Mark Mahaney, has reportedly recommended that investors bid $115 per share. I am nervous that, if I chip in my own valuation ideas, someone will (incorrectly) interpret this as my giving "investment advice" and demand that the SEC ship me to Alcatraz. I will simply observe, therefore, that the range of reasonable valuations of a high-growth, high-risk stock like Google is wide enough to fly a 747 through. No one knows what Google is worth, and its intrinsic value may prove far lower or far higher than the company's initial $108 to $135 range.

As for what other bidders will do, I suspect that many will play the Google auction game for the same reasons I plan to: out of curiosity and fun and/or the remote possibility of getting shares at a reasonable price. Some others, unfortunately, will probably participate because they "like the company" or "want to make money" or some other idiotic reason, and regardless of the outcome, some percentage of this group will probably sue. Still, I suspect that bidding activity will be intense, that many who bid will want to "win" shares (an ironic choice of word, given the potential behavior of the stock), and that this desire may cause some to bid higher than they probably should.

I will be bidding for five shares. For the reason described above, I won't reveal my bid price until after the auction, but then I will almost certainly describe how much I lost and why. Happy (frivolous) bidding!

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 24. Aug 13, 2004 1:58 PM

» radiodude - Re: Playboy Article - Selective Disclosure

In response to message posted by Kirk:

Playboy..... I find that odd in and of itself for several reasons. Slightly poor judgement if they want to be taken seriously in a world where a huge percenatge of investors are now female.

So, you gotta buy a porn magazine to see how the founders think -- real swift move Google.

-- posted by radiodude

http://news.myway.com/top/article/id/417...

Top 25. Aug 18, 2004 1:03 PM

» radiodude - Google Slashes IPO, SEC OK Expected Today

.
Do these people have any idea what they are doing?
It takes experience to pull off an IPO, something these people lack. (I've been at 2 companies as they went IPO -- it's not easy)

Google Slashes IPO, SEC OK Expected Today

Aug 18, 12:38 PM (ET)

By Nicole Maestri
NEW YORK (Reuters) - Google Inc. slashed the size of its closely watched initial public offering nearly in half to less than $2 billion on Wednesday, splashing cold water on what has been touted as the hottest Internet IPO in years.

But securities regulators are expected to declare Google's registration statement effective after 4 p.m. EDT (2000 GMT), sources familiar with the matter said, which would pave the way for the world's most popular Web search engine to price its shares and sell them to the public.

Google shares could make their market debut on the Nasdaq stock market (NDAQ.OB) as soon as Thursday, ending the wait for the year's most anticipated IPO.

The offering is now slated to bring in as much as $1.9 billion, sharply lower then expectations that it would raise $3.5 billion if the shares priced at the top of Google's original estimated range of $108 to $135 per share. On Wednesday, Google cut the range to between $85 and $95 a share.

The revision came as Google disclosed in an amended filing that the U.S. Securities and Exchange Commission has asked for "additional information" about the publication of a Playboy magazine article featuring an interview with Google's co-founders.

Google's unusual auction-based IPO has attracted skeptics since it was announced in April, and the IPO is bumping up against a jittery market. Roughly 60 percent of this month's IPOs have priced below their estimated range, according to Thomson Financial.

But market conditions are not purely to blame. Many investors said Google's initial price range was overly optimistic and were wary of investing in the stock.

In addition, Google has disclosed that its general counsel received a notice that the SEC staff intends to recommend the commission pursue civil penalties against him; the Playboy interview has drawn regulatory scrutiny; and the SEC has started an informal inquiry into Google's offer to buy back 23.2 million shares it may have issued illegally.

Google reiterated on Wednesday that it does not believe its involvement in the Playboy article violated securities rules.

"They better get their act together, otherwise they will face a lot of investor scrutiny above and beyond what they probably deserve," said Christopher Baggini, who manages three funds with total assets of about $900 million at Gartmore Global Investments. He said that even $85 to $95 per share was "not necessarily low enough" for the IPO price.

-- posted by radiodude

Top 26. Aug 22, 2004 4:49 PM

» Normxxx - Gambling on Google

Gambling on Google—The Thrilling Conclusion
I bet on the IPO and win.

By Henry Blodget | Thursday, Aug. 19, 2004, at 2:41 PM PT

So I won the Google game. A couple of hours after the market closed on Wednesday, I got a polite e-mail informing me that my bid had been accepted and that I would soon be the proud owner of some Google stock at the IPO price of $85 per share. At 1:04 a.m., I got a second e-mail saying that I had been allocated exactly four shares, one fewer than I had bid for. At noon today, the stock opened at $100 on the Nasdaq. I immediately flipped all four shares. After brokerage commissions and taxes, I appear to have banked about 20 bucks.

What was my "winning secret"? Well, I spent days analyzing financial statements and industry projections and quarterly results and comparable companies and cash flows and valuation multiples and discount rates and customer feedback and … No. I made a few back-of-the-envelope calculations, determined that the stock could be worth just about anything, and concluded that, if I placed my bid at $98, just above the top of the recently reduced $85-$95 price range, the company would be hard-pressed to declare this "speculative" (the initial range was $108-$135, after all), and that, thanks to the dynamics of this type of auction, I would get stock at whatever the IPO price was. I also figured that, given the weeks of Bronx cheers culminating in the near-farcical revelation that the company's idiot-savant founders had thumbed their noses at securities laws by granting a quiet-period interview to, of all publications, Playboy—the company would want to stem the PR bleeding by pricing low enough to ensure the stock popped. Miraculously, my logic appears to have been right. Too bad I didn't bid for 5,000 shares.

(I should add that my first bid, before the company slashed the initial price range, was $113. I should also add that, because I have now sold my shares, the stock is almost guaranteed to rocket straight to $200—at which point I will feel like shooting myself.)

So, what's the takeaway? Did the auction work? Was it a better method than the traditional IPO? Was it more fair, more democratic? Did it discourage speculation? Did it eliminate the first-day pop? Did it crack apart one of the last great price-fixing schemes—the Wall Street IPO cartel?

Sort of. The company's secrecy and arrogance did alienate most of Wall Street—Google management has now learned, presumably, that you don't whip up demand for your stock by making big investors feel that you are doing them a favor by allowing them to buy it. But this alienation probably would have happened regardless. The company cracked the Wall Street IPO pricing cartel, but that doesn't mean smaller and less influential companies can do the same. The company did discourage (some) speculation by shouting from the rooftops that speculators would lose money—before ensuring that speculators wouldn't by pricing the IPO low. The auction did allow little guys to bid and, in some cases, to win, and this—from an entertainment perspective, anyway—was undeniably fun.

This said, in the end, the auction was not, for all intents and purposes, much different from the traditional IPO. The company maintained control over pricing and probably priced shares below the auction "clearing price." Professional investors still got better information than amateurs. (There was lots of scuttlebutt, nuance, and management body language they got access to that you didn't.) Most important, far from eliminating the first-day pop, the company rewarded IPO investors with a gift of nearly $300 million.

And so the fun part ends. Now Google has to prove it's worth nearly $30 billion.

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 27. Oct 24, 2004 9:32 PM

» passenger - Re: I should have bought Google at the IPO!

In response to I should have bought Google at the IPO! posted by Kirk:

I think the lock up is 3 months for institution investors. Employees can sell small portions of their vested share in 15/30 days after IPO. Someone might regreted had sold too early.

I suspect more selling if the president elected is the one who plan to take away some tax cut for the top rich.

-- posted by passenger

Top 28. Feb 12, 2005 4:42 PM

» passenger - Re: Re: Google IPO Troubles with Investment Banks

In response to Re: Google IPO Troubles with Investment Banks posted by Kirk:

It is hard to put a finger on but some of us over 40's folks have a way of smelling out bad deals and ideas that young, inexperienced folks don't.

Kirk:

You are so right regarding GOOG kids. See the story here:
http://99zeros.blogspot.com/

I am wondering if it happened in HP under HP Way, whether it will make difference(probably not much difference).

-- posted by passenger

Top 29. Apr 21, 2005 4:49 PM

» TonyFromGlendale - Gambling on Google

Google was down some last Thursday and Friday (April 14-15,2005)and so I bought 100 shares each day. Today I sold after hours at $217.63 all 200 shares. Gosh was I smiling...until I checked Waterhouse after hours trading and saw GOOG trading at $240.00 a share. So I made a little more than $5900 in a week, and left almost $4500 for the next guy who got those 200 shares. Hope it was one of YOU.

-- posted by TonyFromGlendale

Top 30. Apr 21, 2005 4:58 PM

» mitelo - Re: Gambling on Google

In response to Gambling on Google posted by TonyFromGlendale:

Congrats, Tony!

I don't have any, but my least favorite person here was short the market today and HEAVILY on the short side of Google. So, for me life is quite good. smile smile smile smile

Again, congrats!!!

-- posted by mitelo