Wall Street's Google FUD
from the how-it-all-works dept
Before Google officially announced their IPO and it was only rumored that they would do an auction style IPO, we noted that the banks would flip out about this, and do whatever they could to stop it. Ever since the rumors first came out, Wall Street has cranked up the PR buzz to suggest that Dutch auction IPOs are bad news. Then, once Google finally did announce their plans to go public, even the banks taking part have started complaining about it and suggesting that people not invest in the IPO. Anyone who knows anything about Wall Street knew this would happen. Unfortunately, plenty of people don't know anything about Wall Street, and still aren't skeptical despite the years of bad advice people have received from bankers. So, it's good that at least someone has written a piece detailing what we've been saying for a while (and thanks to the anonymous submitter who point this out to us): Wall Street is doing everything possible to make Google look bad so no other uppity company gets the idea to actually price their shares at a market price, rather than leaving a big pile of money on the table for the bankers and their friends. Now, it is true that the auction process has its problems as well. It's not the perfect solution. However, it certainly sounds better than selling shares to an underwriter at $10 who passes it on to their friends to flip that same day at $90, as happened during the boom years. Investment bankers purposely underprice shares, which is bad for the company selling shares. The auction may tend to overprice shares (which could be bad for investors buying into it), but it doesn't leave money on the table for the company going public.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Reader Comments
Subscribe: RSS
View by: Time | Thread
Google is Guilty of creating their own IPO disaste
If they would have had a top Wall Street firm in from the start they could have saved themselves about 20 Billion that they lost with the Public Relations problems they have now.
Do you think that selling the public class "B" shares with no voting power is fair, this is the biggest scam since snake oil.
The press, public and Wall Street is right about Google, they are selling snake oil.
No one is buying that crap.
Not even the so called dumb public investors Google was counting on to support this silly Dutch Auction they created.
[ link to this | view in chronology ]
Google's Last Stand at the Enron Coral
Finally, even the suggestion of an opening price that represents 300x earning should be the *ONLY* warning that investors need to steer well clear of this accident waiting to happen.
...anyway, everyone knows that the only good companies these days are privately held (and remain that way).
[ link to this | view in chronology ]
Re: Google's Last Stand at the Enron Coral
[ link to this | view in chronology ]