1. just wondering how to put in a bid

Posted at 4:40AM on Dec 19th 2005 by Kathy Schmit

2. The Wall Street Journal has extensive coverage of the entire process. And, of course, Google released a letter describing how the IPO will work.

HOW TO BID FOR A PIECE . . .
Qualify to participate in the IPO.
Submit your bid.
Hope that you get a piece.
If you bid at or above the offering price, you get Google shares.

Search for this article on WSJ: "Investors Eagerly Anticipate
Google's Public Offering"

Posted at 4:40AM on Dec 19th 2005 by Mike Outmesguine

3. From what I understand, one cannot just open an account with CSFB, and so when I tried to open an account with Morgan Stanley, I was basically discouraged, if not outright rejected by two different brokers. They both explained that their company directors issued orders/policies/guidelines that they did not want people opening accounts just to get in on the Google IPO, and that even if they did open accounts, the company would not allow customers less than 90 days, to invest in IPOs, and that all of there current (and then only the high dollar) investors would have a chance to bid. I pointed out that I understood the reason behind the auction was to bypass such traditional favoritism, and they both said that that was just not the case. I had basically the same conversation (about the institutional clients, then the “best customers” getting options first) with my personal broker with another firm, 3 weeks ago, before we know that only MS and CSFB were the only ones involved, and that a Dutch auction would take place...so what is the difference now? I mentioned to both the MS folks that I didn't understand why they were reluctant to open new accounts, since at a minimum they would be making $87 million from the IPO, as well as $100 account fee for each new account, plus the transaction fee. They both said to keep checking back every few weeks…at which point I asked that if I had to be an account holder for 90 days before I could be eligible for the IPO, wouldn’t it make sense for me to go ahead and open an account, as to begin the 90 day countdown sooner, rather than later? I just got an odd, non-response. Has Google inadvertently given MS & CSFB investors a private auction? If so, it would seem that their initial plans to "democratize" the process has had the opposite effect. What gives? Has anyone else experienced this? Oddly, since with a basic Google search, one can easily find someone with similar experiences on just about any subject imaginable, I have not found anything similar to this…what’s up? What am I not understanding about this process?

Posted at 4:40AM on Dec 19th 2005 by Ashley

4. Sorry about all the spelling errors in the previous--I should have edited a bit before posting!

Posted at 4:40AM on Dec 19th 2005 by Ashley

5. So, you think you want to buy Google stock?
Answers to frequently asked questions
Tom Abate, John Shinal, Chronicle Staff Writers
Saturday, May 1, 2004
©2004 San Francisco Chronicle | Feedback | FAQ


URL: sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/05/01/BUG0O6E18R1.DTL


Now that Internet search company Google Inc. has filed for an initial public offering, individual investors probably have two basic questions: Should I try to buy Google's IPO shares, and if so, how do I do it?

What follows is a list of questions and answers to help readers determine whether they may want to get a piece of the biggest IPO since the collapse of the Internet bubble.

Q: How can I learn about Google's operations and finances?

A: Google has submitted a stock registration statement, known as an S-1 filing, with the U.S. Securities and Exchange Commission. The statement, which includes the company's income statement, balance sheet and information about Google's management, strategy and competition, is available to the public on the Internet at www.sec.gov.

Q: How can I buy shares?

A: The first step is to open a brokerage account at one of the investment banks that will help Google conduct its stock offering. As of now, the only banks listed in Google's stock registration statement are the giant Wall Street investment banks Morgan Stanley and Credit Suisse First Boston, which usually cater to wealthy investors.

However, Google has said that it will add more banks later to create a group "that serves all segments of the investing public." That makes it likely that Google will expand the list to include brokerage firms that cater to mom- and-pop investors.

Q: But should I try to buy shares?

A: Google is a great service that anyone can use, but that doesn't mean its shares will be a good investment. As a rule, novice investors should keep their money in mutual funds rather than picking individual shares. Even sophisticated investors who've bought and sold shares in the past, might want to be very careful before investing in IPOs.

Q: Why?

A: Because over the long run, IPOs underperform the market. At least that's what two finance professors, Jay Ritter of the University of Florida and Tim Loughran of the University of Notre Dame, found when they studied more than 7,500 IPOs filed between 1979 and 2002. After five years, these IPOs had gained an average 9.2 percent annual return. Not bad. But a basket of established companies, similar in size to the IPO firms, averaged annual gains of 13.4 percent over the five-year study period. In short, investors theoretically made more money while taking less risk.

Q: But during the Internet boom, IPOs zoomed on the first day.

A: That's true. Ritter and Loughran found that during the Internet bubble, the average stock climbed 65 percent in the first day. But dozens of those IPO wonders have vanished. Poof. They didn't have staying power as companies. And except for those lucky few investors who got in early and got out quickly, they didn't reward their stockholders.

Q: How will Google manage its IPO?

A: Google plans to use an online auction method, where all bidders compete in an open market. That means the IPO price is likely to be much higher than it would be in a traditional IPO, since demand from all interested investors will determine what shares will cost, not just a handful of privileged investors who typically get their hands on IPOs.

Q: How will the auction work?

A: Account holders at the banks managing Google's offering will have the opportunity to submit bids stating how many shares of stock they are willing to buy and what price they are willing to pay. Those bids will be compiled in a "master order book," which will be available to bankers and Google executives but kept sealed from all bidders.

When the auction is closed, Google executives and their bankers will go through the order book and award shares first to investors who bid the highest price, then to the next highest bid, and so on, until they reach a price at which the number of shares bid on equals the number of shares that Google will sell.

That price is known as the clearing price. Google has pledged to price its IPO "equal to or nearly equal to" the clearing price, which means everyone will pay the same price regardless of what their bid was.

Because it's highly likely that there will be more demand than shares to sell, Google has pledged to increase the number of shares to meet demand in an effort to keep the price from going too high. Whether they will be successful is an open question.

Q: How does this auction differ from the old way of distributing IPO shares?

A: The auction method represents a revolutionary change from typical stock offerings. Traditionally, companies and their investment bankers chose the number of shares to sell and what price to charge in an IPO. During the Internet boom, those IPO prices were typically far lower than the prices those shares could command on the open market. That resulted in the notorious first- day pop in which the stock price would double, triple or rise even more from the IPO price in its first day of trading on the open stock market. During the dot-com boom, getting in on a hot IPO was a license to print money, because IPO investors could immediately "flip" hot stocks to average buyers to cash in on those spectacular first-day gains.

Q: Didn't that open the IPO process to abuse?

A: Yes. Investment bankers doled out IPO shares to favored clients, often big-shot executives of companies from which they were trying to get business. In exchange, some investors rewarded the investment banks by routing their stock trades through the bank's brokerage units, often paying artificially high commissions. It's no secret that the banks often intentionally underpriced stock offerings to guarantee that shares would go up once stocks started trading publicly. While that was good for the lucky few who got IPO shares, it was bad for the issuing companies, which could have sold shares at higher prices and kept for themselves the money the market was willing to pay.

Q: Won't the auction method solve the problems of the Internet IPOs?

A: The Google auction should stop bankers from doling out IPO shares to big investors. On the other hand, the hype around the offering is reminiscent of the bubble fever, and investors could get carried away.

Q: I understand there are two classes of shares.

A: The stock held by the founders, key managers and original investors will have 10 times the voting power of the shares sold to ordinary investors. Google's founders say they did this to allow the company to avoid the pressure to run the business in a short-sighted, quarter-to-quarter fashion, and to preserve the corporate culture that has thus far made it a success. Companies like the New York Times have similar dual-class share arrangements. But some corporate governance experts say this arrangement makes ordinary shareholders second-class corporate citizens.

Q: So how do I evaluate all this?

A: Wise investments begin with good research. Download and read the prospectus. Evaluate the management. Form an opinion about whether Google will be able to sustain its leadership position. And be honest about your goals. If you want to own Google shares to have bragging rights, that's OK, as long as you don't risk your entire nest egg. But if your objective is a good return on investment, balance the potential rewards of betting on a hot new company against the risk of getting sucked in by hype.

E-mail Tom Abate at tabate@sfchronicle.com and John Shinal at jshinal@sfchronicle.com.

Posted at 4:40AM on Dec 19th 2005 by Ashley

6. How do I get a copy of the prospectus?

Posted at 4:40AM on Dec 19th 2005 by Alexander T. Lichauco

7.

washingtonpost.com
Google's IPO


Leslie Walker
.com Columnist
Friday, April 30, 2004; 11:00 AM


Internet search engine leader Google Inc. filed its long-awaited IPO plans on Thursday, setting the stage for the company to make its stock market debut -- a move that could be months away. Leslie Walker was online to discuss the IPO's implications. She wrote on Thursday that Google Gold could turn out to be Fool's Gold, especially if trends revealed this week in two new reports on venture capital persist.

A transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

________________________________________________

washingtonpost.com: Leslie, thanks for joining us. What are the IPO's implications to the people who use its site? What advancements will all that investment bring?

Leslie Walker: Hello everyone. Opinion is divided on how the IPO will affect Google users--which, at the rate it's growing, could include just about everybody soon. Some worry that selling a chunk of itself to the public will stifle Google's free-wheeling culture of innovation. That seems inevitable, but not necessarily a bad thing considering the lengths to which Google is going to preserve its creative culture. The dual-classes of stock, for one thing, will allow company executives and other insiders to retain more voting power.

It's worth noting that co-founders Larry Page and Sergey Brin wrote in a cover letter to their SEC filing that "we will not shy way from high-risk, high-reward projects because of short-term earnings pressure." They pledged to continue letting employees spend 20 percent of the Google work time working on pet projects they believe will improve the service.

Specifically, the IPO filing says Google will use the proceeds for just about everything--research and development, sales and marketing, general administration, capital expenditures and purchasing other companies.

_______________________

Washington, D.C.: How do you think the online stock auction will affect Google's public stock price?

Leslie Walker: Conventional wisdom says the online auction should push up the initial offering price, since more people will have access to those shares. It's the law of supply and demand. That, of course, should mean more money for the original investors, employees and current shareholders. But it also may mean less of a first-day "pop" on the trading price, since more of the early demand may get fulfilled at the offering price.

Given the intensity of Googlemania, though, that last statement is debatable. It's a tough call what will happen after public trading starts.

_______________________

Chicago, IL: What are the odds of the little guy being able to get Google shares in the IPO and where do we go to bid on them?

Leslie Walker: Little guys will have a much better shot at getting Google IPO shares than IPO shares of other companies. That's a key feature of this auction. That said, the kinks are still being ironed out in how it will work. And the odds of anyone getting shares will be determined partly by the strength of demand--how many folks submit bids--and that remains to be seen.

As for where to bid, that, too, is still being worked out. The requirements outlined so far indicate that bidders must have a brokerage account with a participating underwriter. So far only two are named--Morgan Stanley and Credit Suisse First Boston. But many more financial institutions likely will be participating once the process kicks into gear. In my opinion, it would be premature for anyone to rush out and open an account with Morgan Stanley now, just because it's a lead underwriter.

_______________________

Washington, D.C.: Hi. I'm very new to investing, but am enticed by the Google IPO, and was excited to hear about the Dutch Auction. However, the section of the Post's article referring to being a "qualified investor" scares me a bit. What steps would one need to go through with Morgan Stanley or CSFB to be able to bid on this IPO? Thanks!

washingtonpost.com: Google's 'Dutch Auction' Opens IPO to the Masses (April 30, 2004)

Leslie Walker: Don't be scared by the mumbo-jumbo in the prospectus. It says:

"Before you can submit a bid, you will be required to qualify by obtaining a unique bidder ID and by meeting an underwriter's account eligibility and suitability requirements. Your unique bidder ID will be issued electronically only after you have accessed an electronic form of this prospectus, including the transcript of the presentation by our management team that will be contained in this prospectus, and only after you have provided identification information."

All that really means is you have to sign up online and get a bidding ID, and you will be required to click to prove you read or accessed the prospectus. They want to make sure you read all about the risks.

I talked to Morgan Stanley and CSFB and they are being inundated with calls, as you can imagine. CSFB doesn't even offer a standard retail investing business--it's for high net-worth individuals and institutional business. Morgan Stanley is a bit different, but it, like other financial institutions that will soon join the Google stock offering, isn't going to want people to open an account for the sole purpose of buying a few Google shares.

_______________________

Arlington, Va.: I've read that Silicon Valley types believe this will completely revive the technology economy. Your thoughts?

Leslie Walker: I strongly disagree. The idea that Google's IPO could create a "big bang" effect and pump up Silicon Valley's economy in the way Netscape's did in 1995 is just silly. Back then, the commercial Internet was just being born. It's much older (though not wiser) now. Google is an incredibly mature and rich company, not an upstart like all those companies that launched the dot-com boom.

_______________________

Washington, DC: Any sense when they will make the offering?

Leslie Walker: The timing of the offering is not predictable yet. The IPO papers filed yesterday kick off a 60-day period in which the Securities and Exchange Commission will comment on the registration before certifying it. Expect a lot of feedback and comments from the SEC, for this is a most unusual IPO.

Moreover, participating investment houses and Google are still working to develop the software that will run this complicated online auction.

_______________________

VA: Is Google like a dot.com or like AOL?

Leslie Walker: Google bears little resemblance to AOL, which rose to fame selling Internet access.

Google is more of a dot.com. It's the quintessential new-media company in my opinion--a cross between the media business (advertising) and a software company (its search engine.)

While it rose to prominence as a Web search service, I expect Google will wind up helping us search for stuff offline, too, making it increasingly a rival to software king Microsoft. Its Gmail, the new email service, suggests it has ambitious expansionary plans.

_______________________

Bowie: I know someone who worked for Google recently. It sounded to me a lot like Apple -- innovative guys (not too many women) with good ideas, except that you can't manage a large company as if it's still a small one.

NOTE: Apple has finally figured out how to act like a successful big company.

Leslie Walker: Good comment. I agree with the Apple comparison, and have been incredibly impressed with Apple's comeback.

_______________________

San Francisco, Calif.: What about Gmail -- do you consider it a privacy invasion?

Also, will Google likely add more services like e-mail after it goes public and has to compete more directly with MSN and Yahoo?

Leslie Walk

Posted at 4:40AM on Dec 19th 2005 by Ashley

8. San Mateo County Times


GoogleIPO not easy to receive
By David McNaughton - COX NEWS SERVICE


Saturday, May 08, 2004 - ATLANTA -- The average Joe may feel he has a less-than-average chance of getting into the Google IPO, despite the company's insistence that it wants to include "both small and large investors."

Potential investors like David Thomas of Grayson, Ga., are being told they'll need to put at least $100,000 into a Morgan Stanley account if they want to bid for Google shares. Credit Suisse First Boston, which caters to the financially secure, expects $1 million.

"The average guy doesn't have $100,000," said Thomas, a teacher.

While both brokerage houses' Atlanta offices confirm the requirements, things could change if Google revises its IPO filing or if it adds other brokerage houses that require smaller minimums. But for now, Morgan Stanley and Credit Suisse First Boston are the only firms named to take bids.

Google could not be reached for comment.

Unlike most such deals in which big players are more likely than small ones to get stock at the initial offering price, Google's founders made a point about equal access for investors.

Larry Page and Sergey Brin said in the IPO filing last week that investors should be able to get as much stock as they want "within reason."

"They made it sound like I could get in at the ground floor," said Thomas.

He said he and his brother, Richard, planned to pool $3,000 and bid $30 a share for Google stock.

But the price of admission is too steep for Thomas, who said he called both Morgan Stanley and Credit Suisse First Boston, and was "shocked" at the minimums.

The little guy, he said, "will not get a share."


Google's IPO is unusual for several reasons, including how the price will be determined. The Mountain View company plans to conduct an auction and use the bidding to help determine the price for the stock. Those who bid high enough will get shares at the price Google and the brokerage houses set after the auction.

If the auction works as intended, the price should not jump after the stock begins trading, said Taulli. In that case, it might be better to buy stock on the open market after the IPO, he said.

"A lot of people don't have a lot of available liquid assets they could transfer" to a brokerage account, he said. "Why do it? If this is an efficient auction, what benefit do you have from diverting $100,000?"

Posted at 4:40AM on Dec 19th 2005 by Ashley

9. Those succeeding in securing Google shares should weigh if they can live with the extended hold period purchase conditions. If you're seeking to flip your Google stock shares shortly after the IPO in the historical post-election market run-up stages, it appears that the hold period for Google shareholders is quite lengthly. Is Google a ten year buy and hold play? If you answer other than YES, find another stock pool to play Flipper in. Google is poised to turn Wall Street and the corporate world upside down.

Posted at 4:40AM on Dec 19th 2005 by Jack Roberts

10. As soon as I receive My ID for Auction to purchase Google stock, can I then use my OWN Brooker ? Which happens to be SCOTTRADE. Can I purchase Google through them? Or do I have to wait when Google is sold on the open market? Thank You, Spiro

Posted at 4:40AM on Dec 19th 2005 by Spiro T. Chelemedos