Mark Fletcher's Blog

I had some money sitting in an Etrade account, so I decided to risk it on the Google IPO. My initial bid was for 50 shares at $100/share. Then, when they lowered the expected price range, I changed my bid to 55 shares at $90/share. The auction closed at $85/share, so I expected to get 55 shares. Instead, looking at my Etrade account this morning, I ended up with 41 shares, or 75% of what I asked for. Conversely, Google has traded up about 15%.
One of the reasons I decided to gamble on the IPO was that I figured that many people who were interested in purchasing stock wouldn’t make it all the way through the bidding process. It was a complicated, multi-step process. And the brokers were requiring people to be qualified investors in order to participate. Many people wouldn’t make it all the way through, and would be forced to purchase shares post-IPO.
In the technology industry, we’re taught to focus on making our products and services easy to use. But in this case, ‘difficulty of use’ could end up being beneficial to the company, by creating a built-in post-IPO demand for the stock. Whether this actually had anything to do with today’s performance is unknown, but it seems in the areas that matter, the IPO was a success.