Going, Going. . .
In a process befitting its status as an egalitarian search engine, Google is planning on selling its IPO through an auction, perhaps as early as next week. Where most IPOs are available only to the privileged and connected few, Google's approach is a democratic process that will enable anyone interested to get in on the ground floor. Or will it be the ground floor? That's the question. We all remember the days when IPOs were bid to astronomic heights - think Palm - only to fall precipitously within days, if not hours (again, think Palm).
Will an auction process create a bidding frenzy that will pump the price higher than it would go in a standard IPO? Google already seems overpriced, with the company placing the value at between $108 and $135 per share. Those prices would put its P/E ratio between 263 and 329. By contrast, the P/E for Yahoo is a “mere” 109, which would put Google at less than $45 per share. I don’t know about you, but I’ll be sitting this one out.