As Expected, Google Announces IPO Plans
from the about-time dept
As was expected by just about everyone (so is it really news?), Google has officially filed to go public today, with plans to raise somewhere around $2.7 billion. Since everyone’s rushing out this story, details are a bit sketchy. Anyway, since there was a lot of confusion around the internet (and apparently even on NPR this morning), Google is only filing to go public today, while they also will be releasing their financial info. This does not mean they went public today. Releasing your financial numbers publicly is very different from doing a public offering (or even filing for one). Update: Some more details trickling out. As some had hoped, it is going to be an auction style IPO (which has both good and bad side effects), there will be dual classes of stock (giving more control to management) and Google is making it clear that they will not be forced into playing short-term financial games: “In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes, this pressure has caused companies to manipulate financial results in order to ‘make their quarter.’ In Warren Buffett’s words, ‘We won’t smooth quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you.”
Comments on “As Expected, Google Announces IPO Plans”
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Releasing your financial numbers publicly is very different from doing a public offering (or even filing for one).
This is EXACTLY why the dot-com boom and bust were ten times worse than they could have been. People lining up in droves to get in on an initial public offering, without even knowing what it IS or how it WORKS, nevermind whether the companies involved have good financials and strong plans on how to develop shareholder value.
A tech/news site should not have to explain fundamental distinctions like this. (I’m not faulting you, Mike.) If an investor expresses curiosity in IPOs, they should already know how stocks work, and stock options, and what a price/earning ratio is. I don’t think the machinist trade mags go to great lengths to explain these things, but the computer software trade mags have been explaining stock market terminology for the past ten years.
Why an offering of $2.7bl will bring insanity into
the offering of only $2.7bl dollars has huge implications.
if u look at the large companies – yahoo, aol, ebay, microsoft, oracle, amazon, etc.. the several billion dollar ones, you will see that the majority of shares are held by the public, usually with one large key shareholder that tends to hold 20% -50% companies at these sizes have a general daily turnover of around $1bn if the public has only $2.7bl worth of shares, then they are actually creating a use pressure of demand here now due to the size of the company, several index funds will have to hold it in their portfolio for the long run so that share is not tradable, and the general public will be running after a small number of shares that can reach a turnover of one day… and that is bringing insanity into the market.