38 Reasons the Google IPO Isn't the Big Deal Some Are Making It Out to Be

If you've had CNBC on today, you have undoubtedly heard that today is the 5-year anniversary of Google's (GOOG) IPO. Someone on the channel even called it the most important IPO of all time. While buyers of GOOG's IPO have certainly made money (+423%), to call it the most important IPO of all time is a bit of hyperbole. Historically, there have been plenty of IPOs that have made investors more money over similar or shorter periods of time. BIDU and FSLR are just two examples of IPOs that have returned more than 800% in a shorter period of time. Additionally, of the current Russell 3000 stocks that were around at the time of GOOG's IPO, 38 have returned more to shareholders over the same time period.

The 38 stocks that are up more than Google over the last five years aren't all penny stocks either. Many of the names highlighted below have market caps of more than $10 billion. The only stock on the list that is larger than GOOG, however, is Apple Computer (AAPL), which has gained more than twice GOOG's 423%. Hmm. Maybe it was a case of stock envy that recently caused GOOG CEO Eric Schmidt to resign from Apple's board.

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Comments

[markfl:]

"If you've had CNBC on today, you have undoubtedly heard that today is the 5-year anniversary of Google's (GOOG) IPO." I did. I seem to recall that the piece aired about the time that the NYSE opened. The stock rallied thereafter, at least briefly. I hesitate to call CNBC's move a free infomercial for Google shares, but I think I will call it that anyway.

Aug 19 03:38 PM

[Donkey Kong:]

The breathless news-readers at CNBC are all excited with GOOG up over 400% since the IPO. Impressive absolute performance, but not so great relatively speaking.

On the 5th year anniversary of going public, MSFT was up over 1300% or a compound annual return of over 70%. So, it fair to say that MSFT was a much more dominant franchise in its first five years of public ownership than GOOG. Certainly, investors thought so.

Aug 19 07:42 PM

[Crocodilian:]

Many things may be "up" more than Google.

None of them has changed the world as Google has. Google's success, technological and financial, is important precisely because its what our system is _supposed_ to do well: encourage and finance disruptive technologies, even when they gore the ox of the establishment.

That's the "creative destruction" of capitalism, so often honored in the breach . . . we honor Google because its the way it _should_ be, even if its not the way that it always is.

Aug 20 12:22 AM

[BullnBear:]

I’ll share a funny, (but personally sad), story around the Google IPO.

I quacked rather loudly that the roughly 100.00 dollar price tag on the IPO was absolutely ridiculous and that if I was even interested in the stock I wouldn’t pick it up until it was around 40.00 because I thought the space was already controlled by Yahoo and we all know what happened after that.

Aug 20 12:38 AM

[isellapple:]

Apple is one of the top 10 growth stocks during this time period. For the next 10 years Apple will certainly maintain their status as one of the top 10 growth stocks! Look for an explosion once consumer confidence returns to the market!

Aug 20 03:19 AM

[H.J. Huneycutt:]

The author puts up an extremely weak case. Of course there are some small cap and micro cap stocks that have performed better than Google over the past few years. That's a silly comparison.

Also, saying FSLR outgained them is sorta irrelevant, because 99%+ of us probably do not depend on any FSLR products; whereas, a majority of us do depend on at least one Google product. It's pretty impressive that a company of Google's size could be one of the biggest gainers over the past five years.

So Apple outgained them? Big deal.

Now, I'm sure the media is overhyping this, because really ... who cares about the anniversary of an IPO ... I certainly don't. But all the same, I think trying to pretend that Google's IPO wasn't one of the most important IPOs of the past few decades is silly.

Aug 20 06:42 AM

[thotdoc:]

What is the point of this article?

No news. No ideas. Not an article that would leave me wanting to have these people advise me.

Aug 20 10:21 AM

[sh_mmer:]

If percent growth is the game, the winners are going to be companies that raised $200K or so at IPO.

Google raised $2.7B, and returned about $11B in 5 years. Microsoft raised $61M at their IPO and returned about $1B after 5 years.

Aug 20 12:30 PM

[Emilio:]

I have to agree with Mr. Donkey Kong.
I also want to remark that on the 5th year anniversary of going public, eBay was up over 1100%. eBay went public in September, 1998 at $53.50 and in September, 2003 it's price was mostly the same $54,80....but after 3 splits (3x1, 2x1, and 2x1). And you have to consider that it had to face Internet Bubble collapse.
As you probably remember, eBay used to be called "the next big thing" (just like Google) and look at eBay now....

Aug 20 01:03 PM

[Ricard:]

I totally agree with this comment's conclusion. eBay was hot, white hot, being one of the only dot-coms that actually posted consistent earnings that grew yoy. This may sound boring and stodgy but most dot-coms couldn't even meet this minimum criteria. Now that the growth has hit a wall, so has eBay stock.

Now GOOG is heralded as a white-hot category killer...IMHO it's only a matter of time until the magic fades - projects like google-anything-outsid... better return $$$ before fickle investors (those that buy into the great fads of the era) get bored.


On Aug 20 01:03 PM Emilio wrote:

> I have to agree with Mr. Donkey Kong.
> I also want to remark that on the 5th year anniversary of going public,
> eBay was up over 1100%. eBay went public in September, 1998 at $53.50
> and in September, 2003 it's price was mostly the same $54,80....but
> after 3 splits (3x1, 2x1, and 2x1). And you have to consider that
> it had to face Internet Bubble collapse.
> As you probably remember, eBay used to be called "the next big thing"
> (just like Google) and look at eBay now....

Aug 20 01:50 PM

[Ricard:]

That should say 'projects like google anything outside of search'...dunno why SA's text editor can't process a simple like like that...


On Aug 20 01:50 PM Ricard wrote:

> Now GOOG is heralded as a white-hot category killer...IMHO it's only
> a matter of time until the magic fades - projects like google-anything-outsid...
> better return $$$ before fickle investors (those that buy into the
> great fads of the era) get bored.

Aug 20 01:51 PM

[armadillo:]

I am thinking it was more important since GOOG said up yours to the investment banks and issued the shares using a Dutch auction. Of course the insiders didn't like it one bit and got the media to poo all over it to drive the price down so they could pick up the shares at a discounted price anyway. Fight the power that be?

Aug 20 03:13 PM