The Google IPO

[erik_kosberg]

http://finance.yahoo.com/

Interestingly Enough
The Google IPO filing reports a Proposed Maximum Aggregate Offering Price of:

$ 2,718,281,828

The value of the natural log e is 2.71828183.

[Redlass]

Er, what does that mean? The proposed maximum aggregate offering price, that is?

The investment club I belong to has just started researching this. Google fits a lot of our criteria, but we're not exactly jumping to buy yet.

[Joubert[$]]

This Google IPO is scary. A lot of folks are calling for a bubble that is even larger than most IPO bubbles. The auction is intriguing, but I still think there are better web buys out there.

Actually, when you come down to it, Google could easily be in 2nd when it comes to search, and based on what Microsoft does, could be third. Then if you look at their financials and see how incredibly concentrated their revenue streams are, you begin to wonder if people are considering buying because they like and use Google, or because they truly want to have an ownership stake.

And Eric, that's a fun coincidence, isn't it?

[hymie[$]]

Joubert said

And Eric, that's a fun coincidence, isn't it?

Well, of course it's no coincidence at all!

[brian_igo]

Joubert said

This Google IPO is scary. A lot of folks are calling for a bubble that is even larger than most IPO bubbles. The auction is intriguing, but I still think there are better web buys out there.

Actually, when you come down to it, Google could easily be in 2nd when it comes to search, and based on what Microsoft does, could be third. Then if you look at their financials and see how incredibly concentrated their revenue streams are, you begin to wonder if people are considering buying because they like and use Google, or because they truly want to have an ownership stake.

What's the joke about two economists? I agree with your points, George, but I don't think they point to the same conclusion.

Google has a concentrated revenue stream, and buyers would be wise to take that risk into account when they assess the fair value of the stock and its place in their portfolio. But Google has a proven business model and they are profitable in ways that neither Yahoo! AOL and Microsoft's free net services or the smaller search engines have been or ever were. Google can't be held responsible if the money bunnies on CNBC are using their IPO to boost interest in their programming.

If there is a bubble, it will happen despite the most candid and far-sighted statements and policies I've seen from a company going public. I've wondered if this IPO was ghostwritten by Warren Buffett. Google has taken some extraordinary steps to ensure that the philosophy of the company remains focused on long-term growth and opportunities, and it may have cost the largest owners hundreds of millions compared to what they might have received in a traditional IPO.

I'm sure there are going to be people who buy the stock because its a well-known brand. But this is not your father's Pets.com offering. They've done it the way you should build a company to take it public and they appear to be on the wisest path I've seen from any dot.com. If someone does buy Google because they use the search engine, I think they'll be in far better shape than those who bought Amazon or even Yahoo! for the same reason.




Brian

[AuntieEmma[$]]

Total crapshoot, IMO. Maybe a good long-term investment, maybe a good buy and flip it over right away get-rich-quick opportunity, maybe a sinkhole where money disappears never to be seen again. I wouldn't feel confident pointing to any one of those possibilities as any more likely than the others.