IEM Tracks Google's Initial Public Offering
August 18, 2004 | CNN Industry WatchShares of Google Inc, the company planning the biggest Internet initial public offering (IPO), may rise on their first day of trading, futures contracts traded on the web show. Contracts on Mountain View, California-based Google's planned US$3.47 billion IPO at Intrade.com showed a 59 per cent chance the shares will advance once trading starts. The futures contracts are at odds with some investors and analysts who say the stock will fall after declining demand for IPOs led 13 companies to withdraw share sales since August 1. The Iowa Electronic Markets, a futures market run by UNIVERSITY OF IOWA business school professors, suggests investors are almost evenly split between traders expecting the shares to trade within the IPO range and those foreseeing a decline. Traders at the Iowa City, Iowa-based market see about a 35 per cent chance that the company will have a first-day market value of US$30 billion to US$35 billion, little changed from Google's own projected IPO price. About 34 percent anticipate a market value of US$25 billion to US$30 billion after the first day, suggesting the shares will fall. Some money managers and analysts echo the sentiments of traders on the Iowa market, saying the slowing market for IPOs and more competition from Microsoft Corp and Yahoo! Inc will hold share gains in check. The article originally appeared in the North American edition of CHINA DAILY.
Contact: Robert Forsythe