Google IPO Less Risky, More Reasonable?


Google's IPO is expected out of the chute as early as Thursday, at an offering price of between $85 and $95--a number that had some investors disappointed.

The lower price may even come as a surprise to financial experts. When S&P reviewed Google's earlier expected IPO price of between $121 and $127 per share, its analysts said they found it "reasonable, but risks abound." Said S&P analyst Scott Kessler:

...There are many risk factors to consider relative to Google,potentially including commoditization of its offerings, challenges related to the introduction of new products and services like e-mail, and competition from the likes of Yahoo and Microsoft.

We'll soon find out whether investors think Google, at the lower price, is less risky and more reasonable and whether it has a positive or negative impact on other tech stocks--including Microsoft and Yahoo.

Blogger Jim Mahar, a finance professor, notes all the fits and starts of Google's offering, from an ill-fated Playboy interview that raised SEC eyebrows to questions over its distribution of stock to employees:

Sooner or later the Google IPO will be completed, but in the meantime we can all take solace in the fact that it will provide classroom material to finance professors for years to come. Almost every day the firm is giving us a great example for teaching!

So while it's not known yet how much the offering will boost the market, it already seems to be providing a boost to higher education.