Wednesday, August 18, 2004

Google arrogance, Part II 

I have already written that Google's management, by its arrogance, is hurting the value of the company. This morning we learn that it is lowering the range of its offering, so its Dutch auction structure is not performing as well as some had expected as recently as last week. More tellingly, CNBC is reporting this morning that the SEC is digging into the Playboy interview, thinking that it might be gun-jumping after all.

As many of us have been asking since last week, how could it not be?


By Anonymous Anonymous, at Wed Aug 18, 08:33:00 AM:

I think you misread the situation. It seems to me this is a clear attempt to support the IPO in the after market by keeping the price "reasonable" up front. Of course they may now deem this necessary because of your previous point about blowing off the institutional investors who would have contributed much of that stability themselves, but it is clearly a rational move.

One other point: I read your argument on why you think the Dutch auction a bad idea, and you made some good points. At the same time, it sounded a lot like a stock Wall Street defense. Perhaps the time has passed for the model you described, in which Wall Street gets the stock into some critical mass of institutional accounts. I give Google credit for testing these assumptions. Often it is hard to see what Wall Street does to justify its 6% IPO fee. There is no one who wants this IPO to fail more than Wall Street firms, and it will be interesting how they respond if it can be deemed a success in any way.  

Post a Comment

This page is powered by Blogger. Isn't yours?