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“Great companies can have lousy stocks if you buy them at the wrong price.” I think this quote pretty much sums it up. Let me firstly give my disclaimer that I am probably the furthest thing from an investor, and you should never even consider using my advice. With that being said, everyone and their brother knows about Google and their looming IPO. It is being made out in many places as the beginning of the next “tech boom”. People are comparing them to Yahoo, Ebay, and other tech stocks that people made BIG money on. The trouble here is that these companies went public much sooner in their company life cycle…or rather than Google has progressed through their life cycle much quicker. G has moved from techie secret, to underground favorite, to media darling, and is now already the target of everyone.
So the question I ask, is “why now”? Yes, they were forced to disclose their earnings due to some archaic legislature (The Periodic Reporting Act of 1934), but just because their finances are public information, does that make it necessary to sell shares to the public?
Most companies file for IPO in order to raise much needed capital, which I can’t really see as being much of an issue for Google, unless they are seriously considering branching into many other areas. The revenue for online advertising will continue to grow (at least I hope ), but for how long? Can G really make their stock an attractive long term investment?
I try not to be a critic of Google, since I have been very impressed with the company as a whole, but I am worried that the world may not be ready for the culture of G (as much as I wish it were). Maybe it is unfair to expect the ideals of the founders to continue, but I really don’t feel like going public was the way to keep those ideals intact. I hope you prove me wrong guys.
Fool.com: Google IPO? No Thanks [The Motley Fool Take] April 30, 2004: