Can you feel it? There's a palpable change in the air, an undeniable tectonic shift in the continent, an inexorable anticipation building up inside. (And for the Stephen King fans out there, it's the moment when Randall Flagg of The Stand realized that the power of sorcery was his once again.)
I'm talking about the mutation of Google from a private institution to a public one. Google, of course, is that superhero search engine that will forever burn the misspelling of the word "googol" in minds around the world. Some recent reports have suggested that the initial public offering (IPO) of the company is imminent because it will have to file a Form 10 -- which will provide financial details of the company and its operations -- because, among other qualifiers, of the fact that it has so many equity owners (estimated at over 500).
The company hasn't stated any definitive plans, so there's no guarantee a public offering will happen. But I think it will, and I think Microsoft (Nasdaq: MSFT) and Yahoo! (Nasdaq: YHOO) will be watching carefully. Whether it's email or shopping, Google is getting aggressive and will become even more powerful once it gets a bunch of cash from the investing public.
The IPO market has returned as of late, and it reminds me of my own experience with newly minted currencies. Understand, I've never gotten in at the ground floor, but I've invested in companies on their first available trading day. I remember being so excited at the prospect of purchasing a stock at its basic inception point, because this was during the market heyday of the late '90s and I was well acquainted with those deliriously delightful charts that show you what your investment would be today had you invested at the beginning in, say, an Amazon.com (Nasdaq: AMZN) or a Cisco Systems (Nasdaq: CSCO).
Here are the three stocks I took positions in immediately after their IPOs: Fox Entertainment (NYSE: FOX), World Wrestling Entertainment (NYSE: WWE), and Barnesandnoble.com. For Fox, I was hoping that the new Star Wars films would propel this issue to frothy heights. Vince McMahon's baby was a play on the assumption that fans would make the stock climb to the top of the ladder, grab the belt suspended above the ring, and be declared Relative Strength Champion. Barnesandnoble.com -- which is supposed to be reabsorbed by Barnes & Noble (NYSE: BKS) at some point -- was spurred by a belief that there was still some juice left in the Internet hysteria.
I lost money on all counts. Significant amounts. I purchased too high and sold too low. There will no doubt be people buying into Google hoping for a Netflix (Nasdaq: NFLX) or a Taser (Nasdaq: TASR). They may in fact get it. I, however, have learned my lesson -- I'm going to try and wait for the dust to clear before I decide what to make of Google.
It's foolish to buy on impulse because of the brand --that's too emotional, and leads to bad entry points. Whether it be Google or one of the upcoming wireless IPOs, caution is a requisite.
David Gardner recommended Amazon.com for
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Fool contributor Steven Mallas owns none of the companies mentioned.
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