In one sense, Google’s much-anticipated IPO will be like a lot of other Internet IPOs over the years: it won’t be cheap.
The company said in an SEC filing Monday that it expects the Dutch auction IPO slated for the week of August 9 to price between $108 and $135 a share. If the company hits the midpoint of that range, it would have a valuation of $32.6 billion, not too far under Yahoo’s $38 billion market cap.
Comparisons to Yahoo don’t stop there.
Google, which will trade on the Nasdaq under the symbol “GOOG,” has earned $143 million so far this year, up from $105.6 million in all of 2003. Revenues of $1.35 billion so far assure that the company will eclipse 2003’s revenues of $1.47 billion, if it hasn’t already.
Assuming Google just duplicates its first-half performance, the company would have net income of $286 million on revenues of $2.7 billion. That would give the company a price-to-earnings ratio of 114 and a price-to-sales ratio of 12. Yahoo, by comparison, trades at a P/E of 110 and a P/S of 15. The S&P 500 trades at 22 times earnings and three times sales, according to Reuters data.
At that price, GOOG won’t be mistaken for a value stock.
Stocks were under pressure once again on Monday, as fears of an economic slowdown remained front and center.
The Nasdaq lost 10 to 1939, the S&P 500 slipped 2 to 1084, and the Dow was unchanged at 9961. Volume rose to 1.41 billion shares on the NYSE, but declined to 1.67 billion on the Nasdaq. Decliners led 22-10 on the NYSE, and 21-9 on the Nasdaq. Downside volume was 70% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 28-96 on the NYSE, and 16-259 on the Nasdaq.
After the close, FindWhat met estimates. Novatel
beat estimates. SonicWall
missed. Genesis Microchip
and Silicon Labs
warned.
During the day, AT&T gained 5% on takeover speculation.
Digitas fell 9% on concern about loss of business from AT&T’s pullout of the long-distance consumer market.
BellSouth gained 3.5% on strong results.
AskJeeves rose 3% after extending its relationship with Google through 2007.
Microsoft climbed 2% on a Barron’s cover story that said the stock is undervalued.
CheckPoint and Andrew
fell on disappointing results.
Cognizant , Anadigics
and Agilysis
rose on their results.