I am not 100% sure about this but I think there is a waiting period before people can start shorting... That way people don't just buy the IPO in the hopes it goes down a ton right away.
Once the stock starts trading in the public market there is no such rule preventing traders from taking short positions in any stock. A short sale is a trade that has to be done from a margin account, where you borrow shares from your broker, sell them in the open market and replace the same amount of shares (give them back to the broker) at a later date. It is called covering your short position. It can be a high risk trade, if the stock continues to rise you must replace the shares at a higher price at a loss. Many traders get caught in a "short squeeze" where those who are trying to cover their short position pushes the stock even higher as they are forced to buy in a rising market for the shares. You can only take a "short position" on an uptick, meaning you can not "SHORT" a stock when it is on a downtick.
The shares do not have to be deposited in brokerage accounts since there are no brokers involved in the initial transaction. This is a novel IPO, and one of the novel approaches is that you will actually have to pay for the shares, not buy them on margin. Nothing to stop you from using them as collateral with a broker later on, but that is a personal choice not a condition of the IPO. The underwriters (normally investment bankers) purpose Anthony is not to broker shares but the handle the financial aspects of the IPO, and undertake to guarantee that the shares will be sold. Normally the underwriters would set the IPO share price but in this case the share price is being set by an internet auction, and shares are being allocated on the basis of the auction, not by fat cat brokers who reserve the plums for themselves and only sell the leftovers to those willing to buy in multimillion blocks.
So where are the shares going to be stored Mel, in a shoe box under the bed? How are they going to be sold, are you going to sell them at the flee market?
Well Mel, the real reason that Google wants to take this road is wide distribution of shares in the hope that folks will not sell the overpriced shares. Google knows that the company is not worth 80 times sales, but they do hope that with all the hype and the "so called unique auction" of shares that it will push the market cap up to this level. If they can maintain a high market capitalization, they can use the stock to acquire other companies to increase the sales of the merged corporations. That is the general idea, trade inflated paper, just as AOL did when they acquired Time Warner, which was the biggest bust in recent stock market history. So bad that Time Warner dumped the AOL Name and will dump the division one day if they can. If you did read any of the articles linked in my posts, you will find that professionals are not falling for the 40-80 Billion dollar projected market capitalizations that Google could be valued at if a lot of speculation on the shares take place. Based on their sales of only 1.2 Billion dollars last year, they have a snowball chance in hell to impress Wall Street once the stock starts trading on the open market.
The good news is that they do not have to impress Wall street at all. Getting stock into the hands of individuals instead of fatcat brokers is the idea, and I for one believe its going to work and so must the underwriters who are putting their money where their mouth is. If is does nothing more than prevent the underwriters from entering short positions and then selling their free green shoes shares to cover them it will be a success. BTW I love it when you use the old tactic of equating anything Google to something that has failed, just so you can imply that Google is bound to fail. I guess Google must have the underwriters fooled, Good we have you here to set us straight.
Mel you are making statements that are completely contrary to what Google will do on day one of public trading. Every company that is public has to impress Wall Street, Google will have every executive they have on CNBC and on every other media outlet to try to push the stock up. As far as having anyone fooled it is mostly the webmasters that are fooled and those that really do not know much about how markets work. If you did your homework you would have known that Merrill Lynch has already pulled out of the IPO deal, so Google is fooling no one. That firm will be the first to take a short position, you can bet on it.
Nice of Merrill Lynch and Google to share that with you. Anything else they have told you that you would care to share?
Mel, you do not believe anything I tell you, nor do you seem to read any of the articles in the links that I gave. So maybe you will believe this guy, he may know just a little bit about business and the technology industry. http://news.com.com/2010-1024-5207589.html?tag=yt
No Anthony just because some guy has a job as an editor is no reason to believe he knows anything about business at all, and as an interesting point he seems to have almost as much anti-google bias as you do, but perhaps not as many smarts. LOL I don't believe everything I read in the newspapers (or in forums for that matter). I do give you full marks for spending so much time finding anti Google rhetoric, though. You are truly dedicated.
Well Mel, since just about everyone under the sun is bringing lawsuits against Google, do you think that they might have done a few things wrong? Let me list a few, or maybe you did not read the opening article in this post that shows Overture claiming that Google stole the technology they use to sell ads? What about AXA, American Wallpaper, Geico, Googles, Froogles and many, many others. It does not seem to be the editor of C-net or myself that is bringing these problems upon Google. Wonder why they want to unload the company on other investors now Mel?
You are really a glutton for punishment Anthony. First off, are these really serious technical or legal issues or just freeloaders trying to grab some of the cash that will be around after the IPO? Its one thing to bring a suit and quite another to win it, and so far the score is Google 1, freeloaders 0, and hope for some of the more frivolous suits already dimming considerably. Read up on the IPO Anthony, they are not unloading the shares they are retaining the control of the company and the majority of the shares for themselves.
Yeah, they have two classes of shares Mel, or did you miss that part of the scam also? The shares they are selling to the public are class B shares with little voting power, too bad folks like you can not see the light and fall for all of the Google propaganda, Google needs folks like you to take full advantage of. Keep up the good work Mel, Larry and Sergey sure like you, you can bet on it!
Yes I guess poor little misguided me will have to suffer along with the rest of the folks..... or is it going to be another HP where the little guys who bought shares early made a fortune? FYI Sergy and Larry really don't need me to help them out at all, I just like to even the score a bit when individuals who can't stand to see anything being a success start badmouthing those who are successful.
Mel, you are a member of WPW, why don't you go over there and look for the thread, "Beyond the hype", then come back and talk. I know you will find it, read the opening post carefully, I did not author it. I am sure you can put out some fires for Larry and Sergey over there also
The simple reason is that they do not need me to do thier thinking for them, but if you think it a good idea why don't you go over there and spread some wisdom?
Are you afraid to read it Mel? Mel I like you, do not think otherwise, I think you are a great forum player and have great knowledge of SEO, so do not take our discussion personal.
Sorry Anthony, but you seem to feel that since you have the extraordinary ability to post words on a forum that everyone who reads them is obligated to go off on whatever fools errand you have in mind. I always consider the source and go only where I want to go. I do not necessarily even like responding to your posts but do like to present a more balanced opinion so that others will not think I agree with you.
What source, the only source you would believe is the one from the Google public relations department. Too bad they will still be telling everyone to buy the stock on their road show, when they know it does not even have value at the opening range, let alone going up 100% where the public share holders could make some money. Even if it does double Mel, your sources at Google will still advise the public to keep buying the stock. Just as AOL was telling everyone to buy AOL when they acquired Time Warner at $80.00 a share, well about 3 months after they made the deal you could have bought AOL for about 7 bucks. Do you still trust YOUR SOURCES MEL?