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Regina,
For a secondary offering, the 'clean up' bid represents the final lot of shares to sell. Seeking a buyer, the investment bank (or company, if a shelf offering) will offer them at a concession, or price discount to the other offering shares. This is not done as often as it once was.
Sheila,
The trading activity today (yesterday, by the time this note posts) was incredibly bullish for Google/GOOG. What else to make of it when 14.2 million shares are offered at a discount ($295 vs. a $303 close on Wednesday) -- and then trades only ~150% of average daily volume. Where were the 'flippers'? Arguably, the total shares traded should (could) have been 2x, 3x, 10x average daily volume. (Especially when one aggregates the potential ripe for market-makers to double- and triple-count the trades.) It seems to me (at least) that even with the quick short term profit in hand, investors see higher prices ahead and will not let go.
Moreover, I cannot stress how brilliantly insightful Allan's comment is. Whereas most investors see only risk in today's price (whether for GOOG or another stock). Allan sees opportunity. The difference is one of perspective: either
A) We stand on the plateau of today's price and look back to see the readily perceptible canyon of lower prices that the stock traversed to get here, or
B) We stand at this same plateau, turn to the obverse direction and gaze into the unknown and uncertain future of a possibly higher share price.
Not to belabor this, but the choice is to look to the past and see risk or look to the future and see reward (opportunity). I always choose opportunity. Embrace uncertainty.
Marty,
Interesting article, although silly. It surprises me that the WSJ betrays so little understanding of the IPO process itself. Moreover, if GOOG shares instead had declined, the author would find and interview a different set of investors ready to moan their sour grapes.
AP,
Once again, you share interesting insights. Thank you. However... (Admit it, you knew there would be a "however"! ;-)
I know a fellow in Vegas who does programming (Python, etc) and web page building, etc; iow, a geek. The first time we met, I asked what brought him to Vegas. He said something like, "Well, I saw this explosion occurring in wireless connections. I lived in LA at the time and perceived that market to be tapped out already. I looked around, and felt Vegas to be virgin territory. So I moved both my business plan and me here." I asked about business -- was it good? His answer, paraphrased, "No, it has been a slog. It has taken a long time to achieve 'critical mass', and even now business remains slow. I should have remained in LA, where business continues to explode..."
I had to ask, "When did you move here?" His answer was a startling, "1995".
My point is when you perceive life from its leading edge, know that the vast populace is way behind. Many people do not have a computer, many who do have a computer do not necessarily know how to use it fully or correctly, many people still suffer with dial-up connections, many people have never heard of Google let alone how to use it, etc. Just because we know of something, does not mean everyone knows the same thing.
The Internet will prove a HUGE medium for everyone that wants to be connected. There will be plenty of room for everyone. Yes, Google will be beset by challenges, one after another; it remains for now, however, the crème de la crème. As such, its shares will decline begrudgingly and rise with alacrity. I admit its day of stock market judgment is out there; the true question is when. I argue it is farther out than you fear and I hope. (Two emotions perfect for investing!)
You remind me of two friends. One is an executive at eBay and the other at YHOO. Both were business majors (one at Stanford, the other at UCLA) and have their MBAs, etc. Repeatedly, they tell me they never, not once, learned at school the difference between a company and its stock. The real world proved a revelation for them. Their schooling is long-past for them... well, except for Wall St University, which is open 5 days/week, 6 1/2 hours each day. Stocks are not companies; it is rare when the fortunes of each align.
Really, this is an unfair comparison; you obviously understand the equity markets. Moreover, I do not know you, although I look forward to the opportunity to meet up. Until then, I am happy you are here and offering your insights. By the way, what do you mean you added to your Google/GOOG position? "But, but, but (he stammers), you're a bear on Google!" :-)
Regina,
For a secondary offering, the 'clean up' bid represents the final lot of shares to sell. Seeking a buyer, the investment bank (or company, if a shelf offering) will offer them at a concession, or price discount to the other offering shares. This is not done as often as it once was.
Sheila,
The trading activity today (yesterday, by the time this note posts) was incredibly bullish for Google/GOOG. What else to make of it when 14.2 million shares are offered at a discount ($295 vs. a $303 close on Wednesday) -- and then trades only ~150% of average daily volume. Where were the 'flippers'? Arguably, the total shares traded should (could) have been 2x, 3x, 10x average daily volume. (Especially when one aggregates the potential ripe for market-makers to double- and triple-count the trades.) It seems to me (at least) that even with the quick short term profit in hand, investors see higher prices ahead and will not let go.
Moreover, I cannot stress how brilliantly insightful Allan's comment is. Whereas most investors see only risk in today's price (whether for GOOG or another stock). Allan sees opportunity. The difference is one of perspective: either
A) We stand on the plateau of today's price and look back to see the readily perceptible canyon of lower prices that the stock traversed to get here, or
B) We stand at this same plateau, turn to the obverse direction and gaze into the unknown and uncertain future of a possibly higher share price.
Not to belabor this, but the choice is to look to the past and see risk or look to the future and see reward (opportunity). I always choose opportunity. Embrace uncertainty.
Marty,
Interesting article, although silly. It surprises me that the WSJ betrays so little understanding of the IPO process itself. Moreover, if GOOG shares instead had declined, the author would find and interview a different set of investors ready to moan their sour grapes.
AP,
Once again, you share interesting insights. Thank you. However... (Admit it, you knew there would be a "however"! ;-)
I know a fellow in Vegas who does programming (Python, etc) and web page building, etc; iow, a geek. The first time we met, I asked what brought him to Vegas. He said something like, "Well, I saw this explosion occurring in wireless connections. I lived in LA at the time and perceived that market to be tapped out already. I looked around, and felt Vegas to be virgin territory. So I moved both my business plan and me here." I asked about business -- was it good? His answer, paraphrased, "No, it has been a slog. It has taken a long time to achieve 'critical mass', and even now business remains slow. I should have remained in LA, where business continues to explode..."
I had to ask, "When did you move here?" His answer was a startling, "1995".
My point is when you perceive life from its leading edge, know that the vast populace is way behind. Many people do not have a computer, many who do have a computer do not necessarily know how to use it fully or correctly, many people still suffer with dial-up connections, many people have never heard of Google let alone how to use it, etc. Just because we know of something, does not mean everyone knows the same thing.
The Internet will prove a HUGE medium for everyone that wants to be connected. There will be plenty of room for everyone. Yes, Google will be beset by challenges, one after another; it remains for now, however, the crème de la crème. As such, its shares will decline begrudgingly and rise with alacrity. I admit its day of stock market judgment is out there; the true question is when. I argue it is farther out than you fear and I hope. (Two emotions perfect for investing!)
You remind me of two friends. One is an executive at eBay and the other at YHOO. Both were business majors (one at Stanford, the other at UCLA) and have their MBAs, etc. Repeatedly, they tell me they never, not once, learned at school the difference between a company and its stock. The real world proved a revelation for them. Their schooling is long-past for them... well, except for Wall St University, which is open 5 days/week, 6 1/2 hours each day. Stocks are not companies; it is rare when the fortunes of each align.
Really, this is an unfair comparison; you obviously understand the equity markets. Moreover, I do not know you, although I look forward to the opportunity to meet up. Until then, I am happy you are here and offering your insights. By the way, what do you mean you added to your Google/GOOG position? "But, but, but (he stammers), you're a bear on Google!" :-)
posted by David M Gordon | 5:17 AM
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