IPO Paper;Google Inc
IPO Paper;Google Inc
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IPO Paper
Select an Initial Public Offering (or a Secondary Offering) completed in the last 10 years in the U.S. capital markets, and discuss and analyze this IPO in seven- to eight-pages, double-spaced. Each student should select a separate company as the subject of the paper. This paper should be submitted to the Week 5 IPO Paper Dropbox.
The paper should discuss the following about the company.
1.Identify the company and its industry.
2.Discuss important financial and other facts about the company from its SEC filings.
3.How successful was the IPO in raising capital?
4.What has happened to the company since the IPO?
5.What is the trend in the stock price of the company since the IPO?
It is due by Saturday 5pm
SAMPLE ANSWER
IPO Paper
Google Inc. started as a search engine that was not very popular at that time. At that time, the company was vested on the Internet with its search engine having a very simple design. At that time, it’s had some loyal internet users that used their search engine services. Furthermore, the company started as a search engine for Stanford University under the domain googlestanford.edu. Later on, the domain google.com was acquired, and the company came to be known as Google Inc. after they incorporated it. Back then, Google was majorly just a search engine that focused mainly on the significance of search words or keywords to enable a user to find what they were searching for on the worldwide wed.
After some time, the company started offering advertisements per keyword. Giving birth to the term advertised funded search engines. The popularity of Google as a search engine was growing steadily. This could be witnessed by the increased number of advertisements that were made available by Google on the internet. Not forgetting the growing number of internet users that preferred using Google as their search engine. All this success could be attributed to the fact that Google had better results than its competitors. Therefore, giving it an added advantage that it took to the betterment of its fortunes.
The company’s initial public offering was on 19th August 2004. The target was to raise at least $billion. Just before the IPO in 2003, the company had received a merger or partnership proposal from Microsoft but eventually the deal never materialized. The company was offering their shares at $85 for each share. The company since then, has experienced to say at least success after success in their new business ideas that came to revolutionize the technology industry.
In the technology industry, Google has been one of the trendsetters. To date, Google can be said to be one of the most used search engines in the world. The success is owed to their simple design and the efficiency of their results. Another key area where Google has mostly invested in is the advertising market online. Most of the e-commerce platforms have been a success because of Google at some point. The results of a keyword search on Google may determine the number of visitors that visit your page. This would in turn raise google rankings and place your e-commerce platform at the forefront of every related keyword search results.
Another area in technology that Google has heavily invested in is the mobile application. Android Inc., which is currently owned by Google in, is one of the most used mobile operating systems that runs on most of the smartphones in the world (Carrière‐Swallow et al., 2013). The popularity of Android OS and the applications that run on the operating system has completely revolutionized the technology industry. Google foresaw the effect that the mobile application industry was going to experience. It saw an opportunity and chose to cease it. Now, it is reaping the fruits of a wise investment.
The technology industry is a very big and profitable one. Google Inc. knew this when after their Initial Public Offering. Their shares rose to $1000, and the prudent individuals who had heavily invested in the company were now paper millionaires. Currently, the company is at the forefront of most technological innovations and discoveries. Reason being, Google is in search of some of the brightest minds in the world to come work with them. These young minds are employed, trained and talents developed. Hence, Google Inc. will continue to dictate the winds of technology and grow at a faster rate than before.
Google, even before it became a company or the corporation it currently is. It was funded by the co-founder of Sun Microsystems. The financial situation of the company at the time was very worrying. Currently, the company boasts of being one of the richest companies in the world. However, this success did not come by good luck. The company’s directors and managers saw an opportunity and ceased it before any other similar company in the world knew of such an existing opportunity. The company went to looking for funding to grow its scope of activities.
The initial public offering was held on 19th August 2004. The company at the time offered its shares at $85 per share. The total number of the shares was 19,605,052. The total sale of the shares, including the ones by selling stockholders gave google a good capital base of close to US$1.67 billion and a significant market capitalization of up to $23 million. The growth of the company, regarding the price of the shares, can be seen to be remarkable. Especially after reporting its earnings on the 17th of October 2013. The stock price of the company closed above $1000.00 in its trading history.
The company then experienced tremendous growth in its stock price since its IPO in 2004. In 2005, the shares gained close to 4% as their share target was raised close to $350. Then followed some rumors that Google was going to be included in the S&P 500. In the tradition of the stock market, when companies are for the first time listed in the S&P 500. They experienced a bump in their share prices that eventually led to the increase in their stock price. However, the company did not get listed in the S&P 500 until late 2006. Furthermore, in spite of the rumors, the company boasted to be worth about $52 billion. Making it one of the largest companies in the world according to its stock price.
Since its first IPO 10 years ago, Google has a lot to celebrate. Over the years, the company has been steadily growing and capacity. The search engine Google became the most popular one in the technological world. This aspect had a very good impact on their returns. With their stock price rising as steadily as the ranks of the company up the ladder of the technology industry. The company has become to be known as an internet giant. The name does not come easily. The success was fought for. In the end, the stock price rose so high that only other ten companies were able to beat it in the stock index.
The stock price of Google since its IPO a decade back has risen 1,294%. In the essence of calculations, a $10,000 investment in Google ten years back would mean a worth of $139,458.82 currently. The company has been revolutionized by its scope of business it partakes in. From the time it was first offered in the stock exchange, the company has transformed its business functions. For one, the company is now less of a web index but an internet destination. The core of its business has significantly evolved over the basic notion of search. Hence, it now offers more content and commerce with an array of other Google services that are considered to be ever growing.
In a broad view of the success of the IPO, I would consider that its IPO was very successful in raising the funds that the company had perceived to be of significance to their activities. However, their target for the IPO was to raise at least $4 billion. Even if the set target was, not achieved. The amount achieved proved to be very significant and enough for their operations at the time. Though, the low level of popularity of the company at the time attributed to it not achieving its set target for the IPO funds. Hence, in one perspective it is true that the IPO was effective and least be said successful in raising the funds that were needed.
Since the IPO back in 2004, the company has entered into a dynamic environment where it does its business activities. Furthermore, the company still continues to come up with new technologies that shake the technology world and win the hearts of the many tech-savvy people in the world (He, 2013). For instance, its dominance in the search engine market has made it so big that it cannot be outstood by any other search engine that is coming up or that exists. Google has become more than a search engine, in its evolution, it has acquired a more involved approach than the basic search notion that it had at the time that the venture started (George, 2014).
Other key areas that Google has vested in are cloud technology, electronic mail, Android OS, digital advertising on the internet, mobile applications and so much more (Webber et al., 2012). The Company continues to research more on the areas that it currently holds much interest in. Furthermore, Google has a lot of interest in innovative individuals who come up with new technologies that will revolutionize the thinking if human beings. The dominance of Google in some areas of the technology industry cannot be brushed aside. It’s become so significant in business and personal life. There is so much to the company than it meets the eye.
The trend in the stock price of the company since their IPO has been interesting. The stock price of the company at the time of their IPO was at $85. Then after approximately one year, the stock price rose to at least $350. Then currently the stock price of their shares is at 1,294% of what it was during the IPO. Therefore, the stock price has raised at least 1,294% after its initial Public Offering. Then it is correct to say the trend of the stock price of Google’s shares has been rising since the IPO and will continue to rise if the company is to continue holding its current position in the technology industry.
In conclusion, at the time of Google’s IPO, their stock price was relatively low. However, at that time, the IPO managed to raise a significant amount of funds that helped the company steer its position in the stock market in an upward trend continuously up to now. The stock price has risen tremendously and still it continues to rise in an upwards manner. Furthermore, with Google dominating some areas in the technology industry, it would take such a long time for its competitors to reach them or overcome them. This ca be witnessed by the Google having the largest market share in areas like mobile applications and internet advertisements; areas that have not been majorly penetrated by other companies considered to be Google’s competitors.
References
Bauckhage, C., & Kersting, K. (2014). Strong Regularities in Growth and Decline of Popularity of Social Media Services. arXiv preprint arXiv:1406.6529.
Carrière‐Swallow, Y., & Labbé, F. (2013). Nowcasting with Google Trends in an emerging market. Journal of Forecasting, 32(4), 289-298.
Choi, H., & Varian, H. (2012). Predicting the present with google trends. Economic Record, 88(s1), 2-9.
Finkle, T. A. (2012). Corporate Entrepreneurship and Innovation in Silicon Valley: The Case of Google, Inc. Entrepreneurship Theory and Practice, 36(4), 863-884.
George, S. (2014). Google Inc.: Not just a search engine, but an engine of strategic product diversification and excellence in corporate strategy. International Journal of Advanced Research in Management and Social Sciences, 3(2), 62-81.
He, L. (2013). Google’s secrets of innovation: Empowering its employees. Forbes, March, 29.
Jarvis, J. (2011). What would Google do?: Reverse-engineering the fastest growing company in the history of the world. Harper Business.
Rindova, V. P., Yeow, A., Martins, L. L., & Faraj, S. (2012). Partnering portfolios, value‐creation logics, and growth trajectories: A comparison of Yahoo and Google (1995 to 2007). Strategic Entrepreneurship Journal, 6(2), 133-151.
Turban, E., King, D., Lee, J. K., Liang, T. P., & Turban, D. C. (2015). Launching a Successful Online Business and EC Projects. In Electronic Commerce (pp. 733-767). Springer International Publishing.
Webber, R. (2012). Digital wars: Apple, Google, Microsoft and the battle for the internet. Journal of Direct, Data and Digital Marketing Practice, 14(1), 84-86.
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