Google's IPO

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At a price upwards of $135 a share, which would result in a market cap of $36 billion, it sounds like one of the biggest rip-offs in recent history. Google is offering less than 10 percent of its stock in the IPO, the rest being held by the founders - the insiders. Since they only intend to sell a small percentage of shares overall, raising only $3 billion cash, the result would be a "paper-wealth" in the tens of billions of dollars for the founders - the insiders.

According to their recent S-1 filings, Google only earned slightly more than $100 million, or about 40 cents per share, and had gross revenues of less than $1 billion. That would give the company an initial P/E of well over 300. Compare that to the industry-wide sentiment that any P/E over the 20 range indicates an overvaluation.

How many times has Morgan Stanley, the brokerage firm handling the deal, been sued and/or fined for fraud? Way too many in recent years. They can't be trusted either.

By way of comparison, what other companies have a market cap in the 36 billion range?

McDonald's Corp. (Revenue $18 billion - P/E 19)
Sony Corp. (Revenue $67 billion - P/E 40)
Walgreen Co. (Revenue $36 billion - P/E 28)

Compare Google (Revenue $1 billion - P/E 350)

I see a bunch of dupes buying the stock. I then see the founders taking on a boat-load of debt and/or selling out, thereby taking huge cash gains. I then see the stock plummeting to a range under $10.

Do your due-diligence on this one.

Nope, I wouldn't buy this IPO with Monopoly money. At least when you lose Monopoly money, you might have a little fun in the process.

Whatever it opens at figure a gain of about 25-30% in the fist three weeks as the sheep will line up to be fleeced. After the euphoria wears off and reality sets in it will plunge like a runawy elevator. Once it picks up momentum I see it around $6-$8 at the end of 6 months. It is hard to soar like an eagle when you are nothing but a turkey. Nortel fell like a brick but Nortel still had value in its fixed assets where are the assets of Google, fixed or otherwise. Don't they go down the elevator every night come 5 P.M.???