The Google IPO
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"There are good IPOs, and there are great IPOs. The Google IPO is the rarest kind: one that draws the white-hot glare of public attention."
- Marc Andreessen, Co-founder of Netscape and a public-offering expert, in March 2004.1
"I would not be stunned if Google closes down. Internet search companies have been through the ringer for the past few weeks. A couple of up days don't make a trend. There isn't a full-throttle conviction behind this market."
- Brian Bolan, Analyst with Marquis Investment Research, in August 19, 2004.2
"It's certainly a success in that Google went public, and they did it the way they wanted to. But it was a failure in the sense that they didn't get the price they could've gotten if they had gone through the traditional method. And they did not eliminate the first-day jump."
- Matt Rhodes-Kropf, Associate Professor of Finance and Economics at Columbia Business School, in August 20, 2004.3
Google used the "Dutch Auction method" (Refer to Exhibit I) to sell its shares because it felt that under the conventional IPO method, most small investors would be unable to invest and the IPO would get limited to some large institutions, investment bankers, and their clients.
1] Michael S. Malone, "The complete guide to Googlemania," Wired Magazine, Issue 12.03, March 2004.
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