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Discussion in 'Community' started by acidrock, May 9, 2004.
Are you planning to buy google's stock when they become public?
i think the proper question would be: are you planning on making a bid and hoping to god that it's right?
if i had some cash lying around, i'd definitely make a bid. but i can't even fathom what would be appropriate, and i'd be way off. Even analysts aren't sure what to bid, i think it'll be a lucky day for some good guessers.
It was mentioned in the Current Events forum that you'll have to be a rich client of an investment company, or employee of one of those companies in order to get shares because of the high demand. If you have no connections at any of those investment firms, I guess you're out of luck.
I really don't know if that's true or not. I don't exactly have wads of cash lying around as a student, so I don't know much about the investing world.
Lets see I could blow my savings on Google's IPO with no garuntee of return, or I could buy a new G5, which do you think is better?
I've heard many experts say that an IPO can be dangerous. It seems that the price will be unusually high at first. The real price won't show up till several months down the line.
I'm not one to gamble, so I don't plan to purchase any Google stocks. I want a Power Mac G5.
I make it a rule never to buy IPOs. when a stock first goes public, it takes at least a few days, normally weeks, to let the stock price settle down and find an appropriate price. In the bidding war that IPOs are, many just keep raising their bids and buy it for way more than they really wanted to just so they can get some and because it is going up so quickly. It is only going up so quickly because of all of the buying pressure, which will be corrected in a short time. Unless you can get in early on an IPO, it is not wise to buy. I remember when PALM had its IPO. The price skyrocketed and some people i know that just had to get in because "it was Palm" bought for way more than they expected and ended up losing money when the stock had a correction.
With that warning, feel free to buy the stock, but i would suggest you wait for a few days or weeks so that the excitement can settle down and you dont get crushed by a correction because you overpaid. Of course this is only if you want to go in for the long term. Daytrading it during the first few days would be very fun.
Yeah, it's how some stocks work, but Google did things a bit differently. Because it's dutch auction, the people who are awarded stock are the ones that put in bids closest to their initial asking price, which no one knows. So in theory, everyone, whether a corporation or a retiree, has an equal chance of predicting the IPO.
Unfortunately, the complicated process scares many potential buyers away, because it's terribly daunting to predict their asking price.
and google stock isn't considered high risk, google has proven itself to be a very solid company, and we've all learned a bit since the big dot-com race. Google will do everything in their power to keep the price from skyrocketing, because they've said they don't want share-flippers (those who but IPO just to sell two days later, when the stock has shot way up, which devalues the stock in the end). Share-flipping was a big part of the dot-com bubble, everyone bought in right away, but sold pretty quickly, and stock that was trading for $275 then is now trading below a dollar. I trust google will stabilize in the ream of traditional big business stocks.
Being a 15 year old, I can't buy stock, although I follow a few of them.
I know that Google is going public, but when is it happening?
If you want to buy some google, go for it. But, try to place a bid at a price that you're comfortable with. As Paul and some others have said, this thing could be VERY volitile in the short run.
One reason for the "dutch auction" is to attempt to cap some of the volatility, but once this baby goes public the price COULD be very erratic (it also might not).
I, for one, am more of a relaxed rational expectations type. Stocks go up because of demand, which is mostly a function of fundamentals (how well the company is doing, relativley speaking). So, if you want to buy google to become a millionare overnight, I'd move on to plan B. But, if you want to buy google because of their stability, market strength, management, and growth potential as a tech firm, then BUY, BUY, BUY!***
***I haven't researched them enough to know whether google is a good buy or not, so don't assume that I somehow know that they are. The trick to making money in financial markets is homework, lots of it.***
if you can get in on the google IPO then go for it. I know I am!
As others have said, you can't get the offering in the traditional way. I'm wary of the [modified] dutch auction. It really could go either way. First, keep in mind that there WILL be plenty of people who hype the price up ridiculously (w00t! g00gle! that's worth--like--my entire savings--$600, baby!). This is going to make the auction annoying and frustrating by bumping out some of the more reasonable prices. However, if you can get in on the low end of accepted prices and that turns out to be fair, then you could make a few bucks.
I don't think people are going to be striking it rich on the auction unless they are very, very lucky. My best suggestion would be to keep your price several dollars below a wise prediction for the first day's close. After all, that's when you're going to sell it.
google went with auction style IPO pricing to discourage first day "pop" effect back in the dotcom bubble days. IPO has become somewhat famous for having the initial day surge in the price, but that's not what it's supposed to do. IPO is meant to raise cash for the company, that's all.
if it works, it's a good thing...
Yeah, you're right. But I think you're still going to see a lot of fast buy and sell going on with the IPO, especially from institutional buyers and those fortunate enough to buy through a broker. The only reason it will be less so with the auction is that people will buy stock at prices that the IPO simply will not reach on the first day. The stock will be so overpriced by opening that buying won't be AS rapid as it would have been otherwise, I think. Nevertheless, people would probably be wise to dump their stock (at a loss) on that day, because it's doubtful that the Google stock will ever get any closer to the prices some people are going to pay.
I am not a financial analyst etc.
I will not be buying google. (no money)
If I were to put into a bid for stock it would determine it in the following manner.
I would look at the earnings per share. (public info) I would multiply that by 30 and that would be my bid. The 30 would be the P/E ratio. for speculative companies the number is higher. 30 is even a bit high but Google has good management and won't be bowing to institutional investors.
As a note for other companies apple is around 60, Walmart is 27, GE is 19.3 GM is 9.2(!)
I'm not going to buy into all the hype and waste my money on the Google IPO.
The company only had revenue of about $900 million, and about $100 million in profits. And 99% of that was from advertising. While this isn't bad, it isn't that great either. I also have a bad feeling that the eventual push by wall street for higher profits will cause Google to lose all the things that make it great.
watch out, EPS isn't a very good marker, because most people don't make their wealth on dividends. P/E is a better one, but it's still got a lot of ambiguities.
Stocks are hard to predict in a formulaic manner. I say, lots of research and even more gut instinct.
There is always looking for companies with a P/A ratio less than 1 and selling em for parts.