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?

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

[w1r3sp33d]

If so you probably weren't in the stock market three years ago during the IPO crashes (and thus probably have a life savings yet to loose.)

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

Disappointing

[AviLazar]

So anticlimactic. I am actually disinfranchised by the whole ordeal. At least the price came down a bit from the overinflated suggested ipo.

Still a good valuation

[markkellman]

Google is valued at around $23B. Even though it is lower than recent estimates, it is still much higher than people were originally speculating: $10-15B.

Media missed boat on WHY share price went downward

[loggia]

Sometimes the media overanalyzes. If you read last night's article in the New York Times, barely anyone mentions that the simple reason the expected share price dropped is that: people did not understand/were confused by the auction process.

I think that's about it. Nothing very complicated at all...

Prove it then

[Anonymous Coward]

If the only reason the price went down was confusion, then today when the stock is listed and can be bought by "normal" means, then it will shoot right up to $135, right?

Not at this price

[tgv]

Way overpriced. What's the traditional rule again? 20 to 30 times the annual profit (after taxes)? How are they ever going to reach, let alone sustain a 1 billion dollar profit per year?

$85 is awfully high

[twbecker]

I agree with the guy in the article who said they should have offered a much larger number of shares at a much lower price. Joe Blow is a lot more likely to throw some "play money" into Google if his say, $1000 buys him 40 or so shares rather than 12.

Re:I'm not sure

[AviLazar]

While I think hyping ones own company is important (and required in this day and age) I believe that Google was elevated to a high status (both by themselves and the community) to such a point as to make them seem "saintly" (for lack of better words).
The initial estimates of their price created such hype and talk -finally it deflated, by a good amount (IIRC the initial estimates were up to 120 per share?).
I remember reading the articles last year, prior to Google going IPO - saying how important this would be to our economy - how Google would save the stock market with all the trading fee revenue, etc... And then came the articles that Google doesn't want to IPO - they want to remain "pure" and "uncompromised" by not having a board of directors and shareholders who would force them to become "evil." In the end, it was a great marketing strategy - playing "hard to get."
If anything, the whole ordeal tired me out and now that the time came, I feel more blah then what I should. Hmm maybe it is because its a "blah" morning for me - but I expected something more cool when I hit Google website - anything - throw the comman person (who won't spend 85/share) a bone :)
Those are my feelings - I do not expect many people to agree with me - but then, that is why these are feelings (opinions).
Thanks for listening

Re:Scoffing Analysts

[TopShelf]

You may be lost without it, but what revenue do they actually generate based on that? Do you click on their ads? That's great, but then where do they go from there?

Mind you, I think Google is a great tool, but they've bungled this IPO pretty badly. Whether they can continue to innovate and grow as a company is an open question that will be interesting to follow over the next few years...

Re:Money for buyouts?

[Atzanteol]

It's funny how many people actually assume that 51% of the shares in a company are *available*. Just because you want to buy, doesn't mean the other guys want to sell.

Classic over-hyped bubble

[ch-chuck]

mod me down, goggle fanboys, but I'm not buying into the hype. I haven't heard anything about how they're going to turn a big bundle of cash into an even bigger bundle for a return on my investment, other than piss it away one advertising experiments. It's basically Internet data-mining of public information anyway.

Give me a good solid energy or pharmaceutical company or something with a steep demand curve, naturally limited supply and customers who gotta have it (like sickly suv owners).

Re:Bit expensive, isn't it?

[pubjames]

competing with Microsoft has historically been a bad move

This is a bit of a meme, and I believe and incorrect one.

Sure, when the PC market was rising Microsoft did really well agressively bagging the OS and Office application markets.

However, it's not been very good moving into established markets, and for a while hasn't even been very good at bagging new, rising markets.

They said they would kill AOL. They didn't even get close. They said they would dominate the software for mobiles market. They haven't. They said they would beat Sony in the game console market, but they haven't.

Once upon a time, everyone in the industry feared Microsoft. Those days are over.

Re:Finally!

[w1r3sp33d]

It has been clear that every SCO headline that has bumped the stock price has been used by execs to dump stock, if anyone still has SCO stock I say sell it now while it's still at 4$ a share before the next IBM case.

Besides what is your soul worth? Personally I didn't invest in defense contractors right after 9-11 although I know some people who did (and did very well at it.) Instead I gave away money to different charities, I will never regret that.

So sell SCO, give away money to a non-profit and get a tax write off! Even if you don't want to send food abroad, or get vacinations to kids, at least you can support Mozilla! http://www.mozilla.org/foundation/donate.html [mozilla.org]

Re:The Beginning of the End?

[cyngus]

Well, this is the exact reason that the dual share structure exists. Each Class A share has one vote, each Class B share, however, has 10 votes. The founders have most of (if not all) the Class B shares. In the end, I believe this gives the founders about 60% voting control of the company. However, their equity ownership (right to profits) is less than this.

One of the reasons that they've done this (as state in their S-1 registration statement) is to prevent the pursuit of short-term profits at the expense of long-term success.

Re:The Beginning of the End?

[Anonymous Coward]

Hasn't this been addressed everytime a google IPO article has come up? I think this is a case for the redundant mod.

Google is using a dutch auction and only opening it up to people they choose. The people influencing google in the future will be the same people influencing them in the past.

Your second line was incomprehensible so I can't really address it.

You last line must be a joke. Google as a monopoly? A monopoly of what? Quality Search Engines? And why would a privately owned, profitable monopoly be worse than any other? And is there such a thing as an unprofitable monopoly (besides arguably the post office)?

Overall I give you post a -1 Redundant/Idiot

Re:Media missed boat on WHY share price went downw

[Erwos]

"people did not understand/were confused by the auction process"

Those people have no business playing in the market, then. Auction theory is in second semester economics here at UMD@CP, including the exact variant that Google is using.

Anyone who gets in at $85 is going to get burned once rational valuation kicks in. We should be thankful it went lower. I've read that most institutional investors are staying far, far away from this one - that's pretty telling, in my eyes.

Geek cred != market cred.

-Erwos

Re:Still a good valuation

[Anonymous Coward]

God damn fucking morons. I wish there was a Fucking Moron mod for posts and if you got 10 of them you got booted forever. Maybe then we could get rid of idiot assholes like you who can't be bothered to read one fucking article that gets linked here. If you don't know what you are talking about then either read the article or shut the fuck up. Here is a quote that might help:

"It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." - Mark Twain (there are like 50 versions of this quote - I prefer this one).

Re:Scoffing Analysts

[totallygeek]

You may be lost without it, but what revenue do they actually generate based on that? Do you click on their ads? That's great, but then where do they go from there?

I know a company that when call volume is low they simply up their cost per click on Google for a couple of hours, spending about $1000, and they have work for the next month. Google ads really work.

For my business, we landed a small contract for some communication line installations from posting an ad on Google. We spent about $60, and received just under $500 in billable services. We are currently working on an ad campaign for Google for some custom software. We will be making Google our only advertisement medium.

Re:Actual company value

[GoofyBoy]

>I do not see how a share can be fairly priced ...
>why the SEC allows this practice?

I assume that this is the heart of the question.

The purpose of SEC is not to determine if a share of a company is fairly priced or not. Thats your job.

Re:Still a good valuation

[Sique]

The fact that only a small amount of Google stock is available for public trading. Currently you can get about 8,5% of Google by buying all outstanding shares. This is far away from controlling the company.

Re:decline of Slashdot

[jseitz]

Thursday?

Jonny, tell him what hes won....

You know...

[the_burton]

I can't understand where all the rampant Google bashing is coming from. I bet you 90% of the slashdot readers use google on a daily basis, and how many of you have kickass gmail accounts? So Google is able to provide these wonderful services for free and still make a profit, and that's pre-ipo. Now they've got this influx of cash - what do you think they're going to do? I bet you anything they're going to ramp up their hiring and recruit some more of the best and brightest.

Secondly, can any of you please read between the lines of whatever investment magazine you all seem to be reading? Do you really think those investment magazines are happy at all with the way Google has done their IPO? Doubtful, and there's a very obvious reason for it: Money. So now the bigwigs who would normally be getting shares at $10 and turning them over at the end of the day for $60 aren't getting their massive returns on investment. By doing the IPO with the dutch auction style, they've cut out all the middle men who reap the rewards of the IPO and leave the company in the dust. Now they've got a stock that is more stable, less volatile and attractive to long term investors which is exactly what they want, because in the long term, Google stock owners win.

You see, the whole thing about the network computer which was hyped a couple years ago but never went anywhere, well that's the future. The OS won't matter anymore because when all of your files are online in the GoogleBase, accessible anywhere and triple backed up, will it matter what OS your computer is running? When you can rent out processing time on the GoogleOS to run hardcore programs? To store mass quantities of pictures, movies, everything with certainty?

Ultimately, Google will take over everything or it will become nothing. It's a gamble, but I always bet on Google.

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

[callipygian-showsyst]

Even for companies that are eventually successfull, there's usually a BIG dip after the initial IPO price.

If you really want google, wait about 90 days before buying it.

I live a couple of miles from Google HQ, so I'm bracing myself for the 500 new Hummers that the 500 new Google Millionairs will be driving!

Seriously, a big pile of money could prove to be a big distraction for the Google Rank and File. I hope the company stays on track.

98

[jyoull]

Well, nice little pop at the open, but the question still remains... should investors be buying $10,000 worth of Google at any price, in particular with many millions more shares potentially coming to market in 14 to 90 days?

(this question does not require looking at the price-of-the-moment for the stock, which is trading heavily and flapping between 96 and 98).

Re:$1.2 B to go to the No. 1 Internet search engin

[ad0gg]

Nah its gonna suck because now google has to answer to its investors. How long before it starts to look like MSN, in the name of profit.

Re:decline of Slashdot

[toddestan]

someone gets +3 informative for telling us what day it is.

Wouldn't of surprised me at all if it had gotten rated "+3 Insightful"...

Re:I'm more interested in...

[Leebert]

Now if I ever make $120,000 in capital gains in the future I will get back the money the IRS stole from me.

Don't blame the IRS, blame Congress.