Want a Piece of the Google Pie?

• Apr. 28, 2004

While the rumored Google IPO seems imminent, I started to wonder - does the average Joe have a shot at buying Google stock when and if it happens? I am not saying whether or not I think it is a good idea, I am simply wondering... If I really wanted a piece of Google pie, could I get it?
 
 A few months ago, it was announced that WR Hambrecht + Co would be the official auction house for Google stock. Well, I have been visiting this site on a regular basis and have not seen any evidence of any kind of offering, auction or otherwise, coming from Google through the WR Hambrecht + Co website. Normally, on this site you do see the upcoming offerings, but there is nothing there for Google.
 
 Then, the other day it was announced that Morgan Stanley and Credit Suisse First Boston will be the lead underwriters for the IPO. So does that mean that the average person can still log on to the WR Hambrecht site and buy Google stock auction style? Probably not.
 
 Likely what will happen, as with most high profile IPO's, is that the underwriters will divide the IPO among their preferred brokers who will then, in turn, sell the offerings to their preferred customers. So, unless you know a broker you are not likely going to get a shot at the initial IPO.
 
 That's not to say that you won't ever get a chance to own Google stock, but when the average Joe does get that chance he may have to pay much more than the initial price. This is because, what may happen, is that those preferred broker customers will turn around and sell the stock when it hits it's high. It's a quick way to make a buck and I am sure they will find some poor sucker to buy the stock at a greatly inflated price.
 
 Of course, there could be a second round of stock offerings, which could still go to an auction format, but the buzz and hype will be gone by then. Also, we will know by then if Google stock will hold it's value.
 
 Of course this is all speculation. Google does have the right, and ability, to tell the underwriters how it would like its IPO handled. If they want a percentage to go to brokers and a percentage to be available to the average Joe then I am confident that the underwriters will accommodate them. After all, the underwriters will also be making a pile of cash on this deal. While no one is saying what this is worth to Google or its underwriters and brokers, I have seen amounts between US$5 and US$15 billion. That is a ton of money for a couple of 30 something programmers who couldn't sell PageRank to pay for dinner 5 short years ago.
 
 So, does the average investor have a shot at Google when, and if, they go public in the next couple days? Probably not, but don't despair, if you really want a piece of the Google pie, I am sure one will come available to you. For a price that is.
  
 Rob Sullivan
 Production Manager
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