We are inching closer to la grande finale of the symbol GOOG making it to the Nasdaq ticker. Yesterday, the SEC gave the Mountain View, CA based search engine company the rubber stamp needed for initial public offering of the stock. But Business Week claims that Google is still not out of the woods, and may still get a slap on the wrist from the Commision.
In the meantime, the company priced on Wednesday its IPO at $85 per share, at the low end of its already reduced price range. So where will GOOG end up being in terms of valuation? The smart money is saying somewhere between eBay and Yahoo!. But we will see the results very soon.
As far as where the stock will trade in the aftermarket, I have discovered a good posting on Paul Kedrosky's blog. It turns out Paul had saved the graph of a New York Times article explaining how Dutch style auctions work, so it is posted further below in order to make it easier to understand John Fitzgibbon Jr.'s analysis on the Francis Gaskins website (Francis is a renowned IPO analyst). Here is what John has to say about the aftermarket price:
|
A true Dutch auction is an auction. The higher-priced orders would be absorbed into the initial offering and not be ready to pounce on the IPO in the aftermarket. The answer to the question –- in a pure auction -- as to how high the stock would trade? "It won’t go above its IPO price." There would be no higher-priced orders to push the stock higher in the aftermarket. They would have been absorbed into the initial offering. |
