Chapter 918: Struggle

Is it true that the two opinions I have thought about are so useless? Paige was a little annoyed.

"Let me reiterate that I support your approach, because auction-style pricing is more in the interests of major shareholders like us,"

Feng Yiping simply didn't copy Page's whitewashed claims, and there was no outsider, so there was no need to pretend.

"It's just that I think it is necessary for us to be aware of the huge difficulties we will face in the operation of such a pricing method,"

"In other words, can we evaluate the advantages and disadvantages of it and the ordinary way of listing, if we can first realize the difficulty of auction-style pricing and do more preparatory work, then In actual operation, it will be more calm and the effect will be better, what do you think?"

The idea is very beautiful, but the execution is particularly poor. This kind of mistake is not only made by ordinary people, but also the two geniuses of Google.

After Google insisted on determining its IPO stock price through a Dutch auction, it immediately detonated the hornet's nest.

The big guys and younger brothers on Wall Street immediately attacked everywhere, or spoke in person, or let reporters and experts publish articles, with one purpose, to sing bad words about Google's move, and to spread rumors that once the stock is listed and traded, it will immediately fall. remarks.

Moreover, these bankers are not just talking, and they are not just shareholders and others. They have also done a lot of things themselves, which is still a very fatal action: they have united many institutional investors and boycotted the subscription of Google shares.

The combined action of Wall Street is very effective.

These measures of theirs have a great impact on the retail investors that Google hopes to benefit during its own listing process. In the eyes of many investors, Google's halo has dimmed or disappeared altogether. Many of them are interested in buying Google stock isn't interesting.

Faced with such a large-scale and consistent bad-mouthing, even those bigwigs on Sand Dune Road, such as Sequoia's Moretz and KPCB's Dole, came forward several times, "This is malicious smearing,"

However, in the minds of ordinary investors, the words of investment banks are more credible than VCs. Besides, there are only a few VCs who come out to support Google, but there are so many investment banks that are not optimistic about Google—you Don't expect retail investors to have any opinions of their own, of course they follow the general trend.

That's all, the point is, Google didn't know what to do at that time, so it made a lot of stupid tricks, maybe it still felt too good. In short, some of Google's actions at that time seemed to have the effect of attacking Wall Street and providing God assists.

For example, because there are too many small and medium-sized investors who are worried about subscribing, that is, too many retail investors, the stock price will be raised too high. After the IPO, the stock price will have limited room to rise, and these users who want to go public through Google and get satisfactory returns will be disappointed with the company. , they issued the "winner's curse" warning more than once, several times.

The winner's curse, the main meaning is that the value of the auction item is generally always overestimated.

The general meaning is that our stocks are risky, so we must be cautious when buying! After listing and trading, the probability of rising is not high, but the possibility of falling is not small. Therefore, if you buy our stock and it really falls then, don't blame us, dear!

Don't say it's unexpected!

Later, when he read the materials, Feng Yiping couldn't figure it out. What kind of genius made such a "magic stroke" decision?

The most classic god assist, nothing more than this! In the eyes of ordinary investors, does this just strongly support the conclusions of those investment banks on Wall Street?

Therefore, Google itself successfully dispelled the enthusiasm of many retail investors, and institutional investors resisted. The final result is that the road show effect is very mediocre, and the market reaction is very cold.

Google finally realized the seriousness of the problem. Page, who rarely accepts interviews, stood up and accepted an interview with Playboy, which naturally contained a lot of private goods, such as our company's performance is very good, our stock's There is no reason why the performance is bad, it must be very good to subscribe to our stock...etc.

Google, which has always advertised that it does not take an unusual path and has always believed that it is not a traditional company, has successfully caused a big trouble by ignoring the quiet period this time.

They successfully aroused the anger of key institutions, that is, the SEC, which is so powerful that even Jobs was afraid, and the SEC immediately sent a letter of concern and inquiry, "During the quiet period, why did you make such remarks? Give me an explanation, you If you don't give me an explanation, then I will give you an explanation,"

What explanation? Naturally, it is the reason for not approving the IPO.

This time, more people think that Google's IPO is really no longer certain!

Of course, Google's ability to solve the problem is not bad. After some effort, they finally appeased the anger of the SEC. However, they are very proud that they only conduct roadshows in the United States, not to mention Asia, and they don't even go to Europe...

The result later was that, originally hoping to issue shares at a price of 108 to 135, it had to be drastically lowered to 85 US dollars in the end, with a maximum difference of 50 US dollars, a shrinkage of nearly 40%!

The original plan to raise $3.3 billion turned out to be only $1.67 billion...  

Moreover, although on the first day of the IPO, the stock price rose by only 18%, which seemed reasonable, but it rose by 27% on the second day. Within three months, Google's stock price quickly exceeded $200.

Therefore, Google's IPO pricing is actually a failure.

Originally a good card, they were forced to play it and almost lost it. This may only be done by a genius.

If you hold these stocks for a long time, whether the issue price is 85 or 135 will actually have little impact, but in the IPO, Feng Yiping will sell 5% of the shares, so whether the issue price is 85 or 135 will have a considerable impact.

He doesn't remember how much Google's total share capital is. He only remembers that the market value after listing is more than 26 billion U.S. dollars. Based on that calculation, the 5% he will sell is worth about 1.3 billion U.S. dollars.

If it can be released at the highest price of 135 originally booked, then this part of my income will be close to 1.6 times of 1.3 billion US dollars, which is well over 2 billion.

Even if it is issued at a low price of 103 US dollars, that is more than 1.2 times, and the final hand will exceed 1.5 billion US dollars.

This is a gap of more than 200 million to 700 million US dollars. It is not a small amount. How can Feng Yiping be optimistic?

Therefore, he would not care about Page's dissatisfaction at this meeting.

"We all know that the IPO price exceeds US$100, which is a dividing line. If it is above or below US$100, the difficulty will be very different. So, can we re-evaluate the possible results of these two methods?"

"I think that the most important basis for judging whether the listing is successful or not is whether it can bring us the most cash. Other considerations for retail investors are secondary. What do you think?"

The two of them, Page and Brin, are always prone to vacillating on some key matters. For example, they certainly hope that the higher the amount of listing and cashing out, the better, but they don’t want the world to think that this is their pursuit, so It is also a fig leaf to give retail investors fair investment opportunities.

As a result, retail investors did not want to buy, and their own income was also greatly reduced.

At this point, Feng Yiping still admires Facebook’s Mark Zuckerberg. He made it clear that my IPO pursuit is high returns. Therefore, he also played auction-style pricing, but because of the clear goal, he played very successfully. On the first day of IPO, the stock price only rose by 0.6%!

But so what? In the eyes of the general public, isn't Facebook still a good company, a great company, and a company worth investing in?

Feng Yiping has many plans and opportunities for next year, and of course the higher the return on listing, the better.

"If the investment bank is confident that our stock will be issued at a high price of more than US$100, I think this is also an option that can be considered. What do you think?"

"Feng, we can't just see immediate benefits. We hope that our listing this time can set an example for subsequent companies and benefit more ordinary investors,"

It is indeed a role model, but it is a role model that is close to the opposite.

"Page, I just want to remind you that some things are just incidental, not the main purpose of the IPO, what do you think?"

"IPO is best to let it return to the essence, not to lose sight of the basics. If the primary and secondary are reversed, then none of our goals may be achieved."

"I'm not opposed to auction-style pricing, I just hope that at least a few of us can have a very clear understanding of the hardships of this road,"

"So you're still in favor of doing this?" Page asked.

"Of course, we will definitely maintain a high degree of consistency. I agree and admire your persistence, and I will fully support and cooperate with you to achieve this goal,"

But that doesn't seem to be what you mean.

"Annie informed me that the meal is ready," Breen interrupted their argument just in time.

Before I knew it, it was already evening.

"Let's eat first, and we'll discuss it tomorrow,"

ps: A group has been established, 454, 231, 228, everyone is welcome to come and give more valuable opinions. I look forward to having the opportunity to communicate with you!