SOURCE: FORBES.com
Google: Bellwether Of The 'OO' Index
Dan Ackman, 08.19.04, 9:05 AM ET
NEW YORK - One of the reasons Google is successful is that it's fun to say. Google. That's fun. Even more fun than Yahoo!.
Now Google (nasdaq: GOOG - news - people ) will trade under the Nasdaq ticker 'GOOG,' which is fun as well. It's also unique. There are no other consonant-double-O-consonant tickers in the U.S. stock market. There is no 'BOOB', perhaps for good reason. There is no 'DOOD' or 'KOOK.' But there is also no 'NOON' or 'TOOT' or 'ZOOZ.' Investors who want sandwiched double-Os will have but one place to go--Google.
That Google has the 'OO' market cornered is no guaranty of success. Indeed, some market pundits, seizing on the reduction in the size and price of Google's IPO, have pronounced the offering a 'failure' or even a 'fiasco.'
We should all have such failures. At the end of the day, Google will have raised $1.7 billion, making it the largest ever Internet IPO by far and one of the largest IPOs of any stripe. The six-year-old company will have a market value of roughly $23 billion, about the same as Lehman Brothers (nyse: LEH - news - people ), Lockheed Martin (nyse: LMT - news - people ) and InterActiveCorp (nasdaq: IACI - news - people ). Its market capitalization is less than Yahoo! (nasdaq: YHOO - news - people ), but it is about the same as where Yahoo!'s was a year ago.
The beauty part is that Google, unlike nearly all Internet firms that went public before it, doesn't really need the money. It is already profitable, so the company can fund itself from operations. There is no 'burn rate.' Of course, all this can change. One risk is that the company will be spoiled by the IPO and start to spend the money it raised foolishly. It has been known to happen.
Aside from raising money for the company, the IPO will allow early employees and investors to cash out. Another good bit of news from the IPO is that when demand softened, venture capitalist firms Kleiner Perkins Caufield & Byers and Sequoia Capital withdrew their combined 4.5 million shares from the IPO. Google founders Lawrence Page and Sergey Brin will also sell fewer shares. But the company will still get its capital.
Brin, Page and the VCs could have priced the shares slightly lower and still made a killing. Instead, their abstinence demonstrates faith in the company's long-term prospects.
But the shares they do not sell today, they still own...
For more, click on the link provided...