Tuesday, August 17, 2004

Google, The IPO, etc

Google, the 'premier' search engine is going to auction its pre-IPO shares ( a pre-market, market?) for somewhere in the neighbourhood of $2.8B, giving it an overall value of about 28B or so.

28B? For a company that had 100M in earnings? They aren't growing that fast to justify these slim margins. The dividend? Never going to happen. Price over sales is something like 15 to one, or whatever. This is a joke beyond compare.

What's funny is that in 'auctioning' its pre-IPO shares, the company has pissed off the very people it will later need to count on when their chips are low: wall street.

Secondly, investment bankers are staying away because they have no interest buying auctioned shares before the IPO that have already reached a maximum share value. There is no where for these shares to go once they hit market but down....

Now, the company is delaying its IPO because of regulatory troubles. They decided to squawk during the 'quiet period' and now can't find the right paper work. Hmmm, arrogant little bastards thought they could pull a fast one, and now they are hooped. Its nice to break the mold, but they are going to fast, too furious, and they seem like they are going to crash, sid viscious style:

Google disclosed Monday that regulators are investigating the company's issuance of millions of shares and options to employees in the years leading up to its IPO. The Mountain View Internet search firm had warned in its IPO documents that it may have violated securities laws when it failed to register the stock and option awards with regulators. Google has offered to repurchase the shares or options at the price at which they were sold, plus interest, to remedy the situation.

Also, regulators have probed an interview Google's founders gave to Playboy magazine amid questions that it may have violated the so-called quiet period surrounding the offering. Google disclosed the contents of the interview in an SEC filing.


Ooops! And these are the days of Sarbannes-Oxley. Where's Eliot, the corporate killer? Good luck with that non-disclosure. Accounting errors are a sure way to ramp up the risk on your securities...way to drop the ball.

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