Google began issuing bidder IDs on Friday at www.ipo.google.com. I obtained my bidder ID today -- the entire process took about seven minutes.
While a bidder ID is required to participate in the Dutch auction, you must also have a brokerage account with a participating underwriter. Once the auction opens, you will place your bid directly with your broker, not with Google.
Two months ago I warned that some brokerages may impose significant eligibility requirements. At that time, my brokerage, Fidelity Investments, required $500,000 on deposit or 36 commissionable trades in the preceeding 12 months to participate. For the Google IPO, Fidelity has now lowered the requirement to $100,000 on deposit or 36 trades.
It appears that there is still significant uncertainty about the timing of the next steps in the auction process. The Fidelity IPO trader I spoke with was called at home on Friday to report to work 30 minutes early for a briefing on the Google IPO. She says the date to begin bidding has not been determined, but she's heard rumors that it would begin next week.
To obtain a bidder ID, you must accept a number of legal agreements and consent to the privacy policy. You must also disclose the social security numbers linked to your brokerage account.
Also on the site are the complete prospectus as filed with the SEC, as well as a video presentation from Google management.
 |
| Google's prospects from a Google user and independent investor |
Bidder IDs now available - 7/31/2004 05:09:31 PM
| |
Google updates auction process, sets price estimate - 7/26/2004 07:29:40 PM
As expected, Google published a revised prospectus that shows the company's estimated IPO pricing, and released more details on the auction process.
The company will sell 24.6 million shares at prices estimated to range between $108 and $135 each, which would value the company at between $29 billion and $36 billion. At this valuation, Google would be worth more than McDonald's or Sony, according to the Wall Street Journal (article here, subscription required). As reported here earlier today, this price estimate may give investors some guidance in their bidding strategy, but it may matter little since the actual price will be set by the Dutch auction process. Google has launched a new site to fuction as a "virtual roadshow" for the IPO, though it was not operational today. According to the WSJ article, "the site (ipo.google.com) will begin accepting investor registrations in the coming days. The registration period, expected to begin as early as today, will last about five business days, according to a person familiar with the matter. Once the registration period has closed, Google will accept bids for as many as 10 business days, according to people familiar with the situation. Then it will determine the offering price, with the shares expected to begin trading roughly two to three weeks from now, according to these people." Google significantly altered how it recognizes revenue in the latest filing. Google originally took a more conservative approach, by reporting net sales instead of gross sales. This made their revenues look smaller than competitors such as Yahoo, which report gross sales. In the current filing, Google changed to reporting sales using a similar method as Yahoo. The bottom-line profit is not affected, but the metrics used to compare against Yahoo and other competitors do change. See this post for more about search engine revenue recognition. |
Google IPO price range to be disclosed - 7/26/2004 03:55:44 AM
The Financial Times reports this morning that Google will disclose the estimated IPO price range as early as today, Monday July 26. But since the actual price will be set by auction, this estimate may be largely irrelevant.
Because the auction process will award shares priced at the "clearing price," or lowest price at which all shares can be sold (and not the price each investor actually bids), individual investors have an incentive to bid high to ensure they receive an allocation of shares. Some analysts believe this behavior will drive the price to an "unsustainable level," and that "Google's stock may collapse once trading begins," due to the phenomenon known as the "winner's curse." Google has reserved the right to set an artificially low price -- below the auction clearing price -- in order to achieve a fairer valuation and avoid a post-IPO crash. If Google did this, the company would have to allocate shares so that each investor receives a pro rata portion less than they initially bid for. But according to the FT article, "the company's founders and at least one of its VC bankers - Mr Mortiz at Sequoia - are adamant for now that it will not use this power." Current analyst estimates value Google at $20 billion to $30 billion, though "some estimates have put the company's initial stock market value at $40bn or more." |
| buygoogle.com |