Has Google Blown Its IPO?

OM Malik pointed to a Jim Cramer column that calls the Google IPO a "fiasco" before the deal even goes out.

I have spent a fair amount of time with Jim and he certainly always calls it as he sees it.

Jim's not always right, but he's rarely totally wrong.

And John Batelle is picking up a similar refrain from the media.

Comments

[Dan Malven]

I'm no where near the student of this stuff that Cramer is, but it seems to me that what Google is doing in this IPO are what you would do if you want to douse the flames of frenzy and keep unsophisticated public investors to a minimum, particularly at the IPO. It all seems to be reasonable actions if what you care about are the instititional investors who do their homework and act rationally. And if institutional investors are gone during August, no big deal, they'll be back in Sept and will buy/sell shares then. Who cares if they don't participate in the IPO? Pumping up the IPO price reduces dilution, but other than that it shouldn't matter a whit to the company or employees what the stock price is at the end of first day of trading, because they are locked up for 6 months anyway. And since a lot of insiders are selling at the IPO, doing what you can to keep the IPO price rational is the self-less, prudent thing to do (at least for the benefit of new investors). I wouldn't be surpised if Google's overt strategy is to keep the price from being artificially inflated.

[Paul K.]

Well, I would take it one step further -- and this an angle Jim C. would almost certainly buy. Google-bashing is on the rise very quickly, and Cramer's piece is prescient and ahead of the pack.

But enough such bashing it will eventually pay to turn contrarian and take the other side of this trade. At some price the Google offering, despite the dual-class shares, the insiders selling, etc., becomes interesting again. Is that $105? I'm not sure, but it's worth reminding yourself that there is a price.