Round two? a.k.a. cash in while it's hot!
August 18, 2005
So I was catching up on news this morning and I ran across word of Google’s second stock offering.
I must say, it’s a brilliant move and if I were in that position I’d do the same. Why not capitalize on people grossly overvaluing your stock? Over on Om’s blog, he’s got a short analysis that puts their current market cap in perspective – it’s currently ridiculous. But hey, if you can raise an easy $4 billion by simply flipping shares at $285, why not?
And of course, people over there aren’t shy about flipping shares either. Check out the insider trading action. Wow, about $400 million being sold per month. I’d venture to guess that’s about as fast as you can possibly flip without causing a stir and a massive correction.
Then again, BillG sold about half a billion himself over the past few months. Wow!
I’m personally curious as to how the market reacts to this when it happens. Do the laws of supply vs. demand apply here?
I also don’t exactly know how this type of transaction works… any bankers out there know? Are these shares the company holds? Or are they going to dilute existing shares?
Update: As Mt. Brightside notes, the tone of this post could come off as kind of bitter and attacking. The tone I was actually going for was slightly incredulous and very tongue-in-cheek. Thanks!