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Another take on the Google IPO.

Discussion in 'Other Off Topic Forum' started by jordan747_400, Jan 12, 2004.

  1. jordan747_400

    jordan747_400 F1 Veteran
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    Dec 9, 2002
    6,926
    Houston, TX
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    Jordan Witherspoon
    This is more of a question really. After a few conversations with local Fchatters I wanted to actually give this some thought...

    When Google first opens on the market, stock prices are going to skyrocket. They will come down shortly though, Id imagine. Rather than try and get in on that rush, what about picking up loads of cheaper shares after the prices fall, and holding onto them for a while as a longer term investment until someone attempts to take over google. If there is a takeover (which I think there will be), the stock prices, again, will soar, and I should have enough shares at a low enough purchase price to make it worthwhile. Does that seem like a reasonable plan? Im a beginner in the stock market, so please give me an honest opinion or share any other ideas!
     
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  3. Evolved

    Evolved F1 Veteran

    Nov 5, 2003
    8,206
    Pittsburgh, PA
    Essentially, Google is a brand, just like Yahoo or MSN. There are plent of companies with more potent search technologies a company could buy for a lot less money. Googles search tool works great for Internet searches but it doesn't work as well on the corporate intranet. Personally I use Vivisimo, a clustering technology invented by a bunch of Carnegie Mellon guys. It works better then google in most cases IMO.

    How many suitable buyers would a company like google have right off the bat? Why haven't they bought google already? There's only a handful of companies worldwide with the resources. I think that goolge will not be bought but it has a lot of potential for a bright future.
    I think they would do much better as a private company. Private enterprises are just so much more mauverable then public ones. In the technology sector this can mean life and death.

    Buy Google stock in a 18-24 months post ipo. If it fallows Netscapes example that'll be how long it takes to go through it's honeymoon cycle and get to a point where it a good buy.
     
  4. rob

    rob F1 Rookie

    May 22, 2002
    3,623
    Vt
    Jordan, the general rule of thumb with an ipo is to wait until it has been public for at least six months and then look into it. If you are looking to get into the market you should look into something that is diversified. Check out the triple Q's.
     
  5. henryr

    henryr F1 World Champ
    Silver Subscribed

    Nov 10, 2003
    17,740
    Atlanta
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    Juan Sánchez Villa-L
    i have extensive experience with new issues, "ipos". generally, you do not want to screw with them for at least a few days of trading unless of course you "think" you know something.

    generally, the hot hyped deals, open up and dont see those levels again. witness the recent "hot" ipo of orbitz, ORBZ. opened up, slowly traded off, broke its issue price and has languished around.

    these guys at google and the bankers are not dumb. it's going to be priced with very little upside.

    you have a much better chance of making money in the small underfollowed deals that you think you know something about.
     
  6. beast

    beast F1 Veteran

    May 31, 2003
    8,965
    Lewisville, TX
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    Rob Guess
    The company i work for went Public mid Dec 03 the stock has gone up 50% from the IPO price and now looks to be settling in.

    I think the days of internet IPO's going thru the roof in the first 2-3 days is long but over with.

    Rob
     
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  8. redjeeper

    redjeeper Formula Junior

    Nov 4, 2003
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    Anthony Griffin
    If anything, you want to wait a little and maybe short the stock because the price WILL drop.
     
  9. need4speed

    need4speed Formula 3

    Nov 3, 2003
    1,597
    Pacific Palisades
    I don't know much about IPOs these days. But a couple of "interesting" stocks to have a look at: adelq & nflx

    adelq: Adelphia Cable is just starting to get out of their court/bankruptcy problems. Could be interesting.

    nflx: Netflix...I'm a subscriber and it's great. What is it's potential? I was told today that BlockBuster is doing the same thing in England as a trial. Is this good or bad for Netflix? Again, very interesting.

    NE1 have opinions or comments on these?
     
  10. jordan747_400

    jordan747_400 F1 Veteran
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    Dec 9, 2002
    6,926
    Houston, TX
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    Jordan Witherspoon
    Thanks for the responses guys! Some good advice! What exactly are the causes for the rule of thumb to wait 6 months after an IPO? Is that just to see how the company settles in stabalizes?
     
  11. beast

    beast F1 Veteran

    May 31, 2003
    8,965
    Lewisville, TX
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    Rob Guess
    Jordan;

    Just a little insite here My company went public on 12-17-03 at 20.50. On 1-6-04 the stock peaked at 32.50. Today it closed at 29.70. If you got into this stock at the IPO price and flipped it within a week you would of had a good return on investment. but if you hold onto it for long term it might be a different story there is nothing that says the stock will not go back to the IPO price or below in the next few weeks.

    Rob
     
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