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Google Stocks - 5 Years on the Nasdaq
Five Year Anniversary
On 19th August 2004, Google had their long awaited first day of trading. Listing on the NASDAQ with an initial price of $85, they ended the days trading at $100.33, up 18%.
The sale of 19.6 million shares raised over $1.6 billion, making the google flotation the third richest US-based IPO at the time.
Its market capitalization, at well over $25 billion, was on a par with Alcoa and Colgate-Palmolive and greater than the Ford Motor Company.
Doing things the Google way
In keeping with their habit of doing things differently, Google planed their IPO to give small investors a better chance of getting shares. The initial public offering was therefore made by means of a "Dutch Auction". This is where potential investors place a bid for the price they are willing to pay and the number of shares they wish to purchase.
The bids are placed in order and starting from the highest bid, stock requests are filled until all of the allocated shares have been sold. The price of the final share is the issue price.
Initially, there was talk of the issue being as high as $135. Weakness in the technology sector and an informal inquiry by the SEC into shares given to employees dampened some of the expected enthusiasm.
The Google Stock Rollercoaster
The first five years has been a wild ride for investors with numerous large rises and falls.
The Google share price peaked in November 2007 at $747.24. Since then the Global Financial Crisis has affect Google like everyone else. Its share price on its 5 year anniversary is likely to be around $440.
At this level, its market capitalization is around $140 billion, over 6 times what it was in 2004.
Google's dominance in the Internet search and advertising market has continued to grow. The recent Yahoo / Microsoft agreement aims to challenge this but time will tell if they have what it takes to make inroads into the google market share.
Millions of people around the globe are used to "Googling it", I am not sure that they will be just as happy to "Bing it"