For some of us, it was a sad day. Google went public and left the ranks of privately held companies. While they may believe that they can maintain their culture, over time it will change. They will be owned by large institutional investors who will have it no other way. Their shares will be traded by computer programs that look at short-term numbers, which couldn’t care less about Google’s unique management style. But, what’s done is done.
Red Herring has an interesting piece on the rather clumsy (see, I told you they would have trouble with the rules for public companies) public offering. “On the surface, Google’s auction was mired by confusion and complication at every turn, ranging from inconsistent bidding rules from underwriters to concerns that the company would face erratic and irrational bids for its stock.”
Although many CEOs yearning to go public were hopeful that Google could break the control of the investment bankers, alas, it really didn’t work very well. The market does not have some deep pool of individual investors being blocked out of the IPO process.
“Mr. Hornik says that if the auction process had truly been a success – where the auction determines how much people are willing to pay for shares – Google’s price would not have jumped on its first day of trading. He adds that Google would have been no better or worse off if it had used the traditional IPO process, and questions whether the auction process might have alienated institutional investors from investing in the future.”
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