Google Goes Public at $85/share

adpowers writes "It is official. Google will have its IPO debut at $85 per share. To quote the article, 'At that price, the low end of its recently revised range, Google raised $1.67 billion, with $1.2 billion to go to the No. 1 Internet search engine and $473 million to Google executives and investors selling their shares.' Trading begins Thursday, August 19th." Got Google?

Re:Who the fuck modded this Informative?

[Anonymous Coward]

You have to admit it's funny, and related to a big event.

Some analysis

[Deag]

The Economist [economist.com] has a good article giving analysis of the IPO.

Wrong Link

[clinko]

Why not use the google stock tool [google.com] to google's Stock...

Re:was any /.er fool enough to buy at 85$

[AliasTheRoot]

It gets set by a mixture of valuation of tangible and intangible assets, potential growth and forward earnings projections. Well that, and how much people are willing to pay.

Re:was any /.er fool enough to buy at 85$

[Hobbex]

I remember Cisco used to be about 85$....

I love it when people consider the cost per stock as an indicator of whether a company is overvalued. It is people like you who create arbitrage in the market for the rest of us to exploit...

Different companies have different number of stocks you know. $85 gives Google a total value of $23 Billion (market capitalization), while Cisco is still worth around $150 billion...

Re:I'm more interested in...

[AliasTheRoot]

Probably not that many, at least in cash terms - plenty will be paper millionaires. Most employee share option schemes have clauses that prevent cashing in on IPO/Acquisition.

Last place I had shares in prevented us from cashing them in until after 6 months had passed. Course there still hasn't been an exit event, so I still have a batch of worthless (for now) options sitting in a filing cabinet somewhere.

Re:Bit expensive, isn't it?

[gbjbaanb]

oh yes, it is an incredibly expensive share - current sales are about $268 million, and it's currently selling shares that value the company at $23 billion. That makes a P/E of 85, which is a teeny bit over-optimistic.

Like, most shares trade at about 15-20 times earnings.

Which means, as you own a little bit of the company, it'll take you 85 years before the company has sold as much ads as you paid, which manke syou think of those terribly overpriced tech boom stocks. Remember when Yahoo had a P/E of 133, with almost no profits? What is it today?...

Unfortunately, there's no data about Google's financials published yet, so you can only speculate on what the price will end up as - but if you base the share price on earnings, you'll get the idea that it can only go down. (which is another reason why this dutch-IPO hasn't gone down well, the professional investors think its overpriced too).

Google to open between 10 AM and 12 PM EDT

[rfunches]

NASDAQ is reporting that Google shares will begin trading sometime between 10 AM and 12 PM EDT. IMO look for an opening between 10 and 10:30 AM EDT.

Re:Useless

[achurch]

I don't understand WHY Google IPO'ed.

As I recall comments from the initial announcement, Google had grown enough that they had to start filing stuff with the SEC like a publicly traded company (which costs lots of money in overhead) anyway, so they decided they might as well go the whole nine yards and raise some money too. Or at least that was one hypothesis.

Re:$85 is awfully high

[Jesus IS the Devil]

1) Offering up larger number of shares can have disastrous effects on the market cap of Google. If they issue too many and the prices get too low, their cap would be lowered undesirably.

2) 40 shares at a lower price, or 12 shares at a higher price, it still adds up to be the same. Only the Joe Shmuck investor thinks he got a better deal with his 40 shares vs. 12 shares. With that said, there are a LOT of Joe Shmucks out there, so it probably will have some effect.

Re:Bit expensive, isn't it?

[Anonymous Coward]

IMAFA (Financial Analyst) Dunno where you got those numbers from. Net Sales last quarter were 700m, but you're measuring price / sales anyway.

P/E is price to earnings, which values GOOG at 118 times earnings for the last 12 months, actually in line with YHOO at ~ 114.

Futures pricing currently suggests that GOOG will close at around $92 at the end of the day.

Currently, however, trading is halted. This means there's such an imbalance in one direction or the other that it's impossible to put a price on the stock. I'd guess this has to do with the dutch auction method: maybe no one planned to flip the stock in the first day, or conversely maybe everyone who wanted stock bought it at auction. (I'd say the latter is more likely given they had to trim the number of shares they issued).

Tech sector IPOs aren't popular right now anyway, so this isn't necesarily GOOG's fault.

Re:was any /.er fool enough to buy at 85$

[afidel]

God when will people stop using that term incorrectly. Google did not raise $23 Billion with this stock offering, therefore $23 Billion is the market valuation, NOT the market capitalization. Market capitalization is stock price times outstanding shares, in Googles case that is significantly less that $23 Billion (in fact $1.67 Billion according to the article).

Re:I'm more interested in...

[RazzleFrog]

You must have gotten some non-typical stock options. Typically you don't pay taxes on stock options until you exercise them. If you were able to sell the stock to pay the taxes then you obviously didn't have options but just a regular stock grant (which is obviously taxable). When you get options they are worthless until the stock price is higher than the option price (trust me I have plenty of those fun $40 options - $17 stock prices).

And not the IRS didn't steal any money from you.

Re:Still a good valuation

[ezzzD55J]

"Now that Google is going public, what would prevent Microsoft from buying a massive amount of shares and basically taking over Google?"

The fact that only a minority of shares is being sold..

Hedge your position

[clone22]

Assuming you have been given a million dollars worth of options but you can't exercise your options for 2 years. What do you do, wait around till the stock's in the toilet and you're penniless? Hell no! That's the time to preserve your captital by hedging your position. Buy put options or get creative with another derivative contract that will protect your interests. The thing that amazes me the most about the dotcom bust is how people just sat by and let their riches turn to dust.

Re:Hedge your position

[Anonymous Coward]

Great idea in theory. Two problems with it:

1. It is generally some months after a company goes public before publicly traded options on its stock are available. (I'm not sure why this is, actually, but it's common.)

2. Most companies insider trader policies prohibit buying or selling options on the company's stock on the open market.

There we go.

[ballpoint]

$49 bid, $137 ask

Re:An open letter to anyone buying GOOG right now

[Anonymous Coward]

I doubt you 'shorted a boatload of it'. Usually its impossible to short a stock until several days (or even weeks) after it IPO's. The stock market people need to establish the options arrangements before you can short and I dont think they have done that yet.

Chart of google from yahoo

[Vlion]

Yahoo chart of Google stock price [yahoo.com]
I'm not sure if the initial peak is simply a rendering "start" artifact or not.

Re:Prove it then

[spludge]

Yup, that's what happened. It shot up.

Re:was any /.er fool enough to buy at 85$

[orenmnero]

No. You are thinking of the float [investopedia.org]. Market capitilization [investopedia.org] includes all outstanding shares [investopedia.org].

Buy yes, they did only raise 1.67 billion with this offering.