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Google IPO Round Up

Chris Richardson
Staff Writer
Published: 2004-08-23

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The majority of the search engine public knows about Google's IPO, unless you've been hiding in a cave the last couple of weeks. Since their shares have been available to the public last Thursday, many articles have been written about the search engine's adventures on Wall Street.

What follows is a round up of some of the major articles and quotes concerning Google and the IPO since then. Today, the stock is priced at $110.78 (and rising) a share, up from the opening rate of $85. Even though Google lowered their prices and used a Dutch auction method of selling their stocks, George Mannes, Senior Writer for TheStreet says, "Google did all right for itself, for its new shareholders and for others as well."

Mannes goes on to quote a buyer named Phillip Pessar, who comments about the Dutch auction, saying that it "gave me an allocation which I might not have gotten."

CNet's UK News version also called Google's IPO a success. Esther Dyson, author of the article, brought up some valid points about Google's preference for using the auction style instead of more traditional methods. Esther says, "(Google) did do a good job of coming up with a reasonable price and setting an example for other companies in the future. Investor pressure for more realistic pricing of IPOs overall should increase."

Esther also offers this point of view, "It may seem a failure from the point of view of some. And it was -- in the short term -- too low as indicated by first-day trading. The company didn't get all the money it could have." However, "Over the long term, I think that the market will prove to have worked, and Google's courageous, if clumsy, debut will help it work better for all companies in the future."

Google's stock performed well enough that two of their lead investment banks decided to exercise their option of buying shares. According to SFGate.com, investment banks Morgan Stanley and Credit Suisse First Boston bought 2.94 million shares of the search engine's stock. The banks receive the stock at the opening price of $85 a share and can resell the stock at market value.

As reported in the SFGate article. "This so-called over-allotment option increases the size of Google's IPO, largely completed earlier this week, by $250 million, to $1.92 billion."

Alas, with every bit of good news, there are always warnings and cautions to be aware of, especially when it comes to Wall Street. An article that appeared in Reuters states the amount of Google's 25 million initial share offering could increase by more that 10 times because Google employees will be allowed to make their shares available to the public. Richard Peterson, a market strategist for Thomson Securities Data says, "There's going to be a big potential to flood the market in Google stock over the next six months right up to Valentine's Day. Common sense tells you that it doesn't bode well for price stability."

But, that's the nature of Wall Street: peaks and valleys, losses and gains. Although Google didn't capitalize on ALL the money that was available, they still had a successful indoctrination into being a public company. Of course, Wall Street success stories are not measured in days. Staying power is what separates the winners and the pretenders. Does Google have the necessary staying power? Only time will tell.

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About the Author:
Chris Richardson is a search engine writer and editor for WebProNews. Visit WebProNews for the latest search news.

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