Google selling more shares?

Bubbagump · #1 03-29-2006, 07:26 PM

Do any of you professionals have any insight as to why google is selling 5 million more shares when they currently have plenty of cash?

Just curios.

Evan · #2 03-29-2006, 08:36 PM

Probably because they think their shares are overvalued, maybe there's some bad news coming out and they don't think they'll be able to get this much money fo rnew shares for a while.

Mr. Now · #3 03-29-2006, 08:58 PM

Hmmm. Here's a hint: the highly dilutive new GOOG shares are To be issued before the next earnings announcement. That rings a little bell...

Many of these shares will go privately to funds that must purchase for passive S&P indexes, which GOOG is joining this Friday.

GOOG management is actually pretty good at screwing investors. A good example is the way they sat on bad news about the $90 million click fraud settlement until massive blocks of insider GOOG stock sales got done.

The CEO himself has sold hundreds of millions in GOOG shares recently.

It is reasonable to assume we will see the S.E.C. scrutinize Google insider sales in the future.

buffett · #4 03-29-2006, 11:17 PM

[ QUOTE ]
the highly dilutive new GOOG shares are To be issued before the next earnings announcement. That rings a little bell...

[/ QUOTE ]
I'm not sure I follow what you're getting at it. Can you spell it out for me?

Mr. Now · #5 03-30-2006, 08:55 AM

The new stock dilutes that value of the old stock. For example if you have 100 million shares floating and you issue another 2 million, the value of the pre-existing float is diminished by 2% unless investors are stupid, which they often are.

Ok you are Google. You want to raise cash. Max cash for your 5.3 million new shares you are going to issue.

If you are Google, you can pick when to issue the stock. Now if you want to maximize the proceeds, you are going to pick a specific issue date from a universe of issue dates that, in your view, will maximize the proceeds on the sale. What I am saying is I notice that Google has selected a date BEFORE the next scheduled Google earning report. Ding ding ding

Google is down 10 points in the pre-market today, Thursday, March 29.

Today and tomorrow are going to be very interesting.

I mean, just can't make this stuff up.

Check it out:
http://www.fuckedgoogle.com

"I guess when Eric Schmidt (the CEO) said last month that Google is not run for the interests of its shareholders, he wasn't joking. As far as Google is concerned, if you own their stock, you can just go [censored] yourself because they DO NOT CARE ABOUT YOU. The CEO actually said that. That's not a joke- he literally said it."

shagjohn · #6 03-30-2006, 09:35 AM

[ QUOTE ]
I mean, just can't make this stuff up.
Check it out:
http://www.fuckedgoogle.com

[/ QUOTE ]
Anyone know about the options deal that's in the March 28 post on that site? Seems kind of odd someone makes 90 million+ overnight and no one's said anything about it, and I can't find any other news about it yet, so who knows?

Perhaps Gecko got it right though, greed is good. And as 16 year old Jonathan Lebed wrote to his lawyer in this article:
"Whether it is analysts, brokers, advisors, Internet traders, or the companies, everybody is manipulating the market. If it wasn't for everybody manipulating the market, there wouldn't be a stock market at all. . . ."

Mr. Now · #7 03-30-2006, 10:17 AM

The game is rigged against you. Plan accordingly.

After a while of working at it, you will look back fondly on your original virginal state of being. Those years represent a priceless education-- if you actually survive long enough to graduate.

buffett · #8 03-30-2006, 10:34 AM

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If you are Google ... you are going to pick a specific issue date ... that ... will maximize the proceeds on the sale... Google has selected a date BEFORE the next scheduled Google earning report.

[/ QUOTE ]
So you are implying that (1) their next earnings report will be a disappointing one, (2) they know this, (3) they suspect the stock will drop after they make a public announcement of the earnings, so (4) they are capitalizing on this by selling the stock now, rather than at a deflated price a couple of weeks from now.

Maybe I'm not cynical enough (it's not often I say that), but I don't buy it. I think the timing of the sale is more aligned with the index inclusion, and that it's a coincidence that both are near an earnings release date.

Mr. Now · #9 03-30-2006, 11:12 AM

yes, yes and yes.

The index inclusion aspect of the issuance of this new stock amounts to collusion by the S&P index funds and Google to absolutely screw the retail longs.

One aspect of this is to artificially depress the price BEFORE inclusion in the S&P. A rise in price after inclusion has the effect of goosing the S&P's return short-term. This short-term hiccup up will likely occur after S&P inclusion due to the retail longs. Have you examined the wording of the SEC filing? The max price of the offering is very telling, my friend.

Do some DD and think it through.

buffett · #10 03-30-2006, 12:49 PM

[ QUOTE ]
Do some DD and think it through.

[/ QUOTE ]
Perhaps I'm being overly sensitive and reading more into this than there is, but based on the context of your other posts I get the feeling that this is a patronizing statement, like I'm young grasshopper speaking to you oh wise one. If that's a wrong assessment, I apologize. I have thought it through, and I respectfully disagree with your conclusion.

[ QUOTE ]
The max price of the offering is very telling, my friend.

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I don't understand what you're implying: the "proposed maximum aggregate offering price" is "$342.98, which represents the average of the high and low sales prices of the Registrant’s Class A common stock as reported by The Nasdaq Stock Market on March 23, 2006" (the day the announcement about the index was made).