The Democratic National Committee may have chosen Boston as the site of this year's party convention for its rich history and old-school charm, or perhaps it was another reason altogether. The Wall Street Journal reported yesterday that the Boston area is home to 1,050 doughnut shops -- one for every 5,750 residents. Even in the midst of our current anti-carb craze, can delegates really pass that up?
Dunkin' Donuts, now owned by Allied Domecq PLC
In today's Motley Fool Take:
- Google's Pricey Come-On
- Shameless Plug: 3-in-1 Credit Report
- Amazon's Got Game
- Discussion Board of the Day: Amazon
- Apple's Cellular Future
- Quote of Note
- More on Fool.com Today
Google's Pricey Come-On
A typical initial public offering (IPO) will have a price range of, say, $12 to $14. Or, if the offering is red-hot, it could be $22 to $24.
Google need not be restrained by such limiting traditions. Rather, it decided to set its price range in the triple digits: $108 to $135. Based on its current share count, that's a valuation range of $29 billion to $36 billion. That's Yahoo!
Some pundits say that the high stock price may scare away retail investors. Well, whenever there is a mania, no stock price is too high. After all, in the late 1990s, investors had no mental hang-ups when paying over $200 per share for stocks like, well, Yahoo!
A company with a $100-plus stock price is unusual in technology. In fact, it has become much more common to see tech stocks at lower prices. Even marquee tech giants, such as Intel
In fact, a triple-digit stock usually has a dividend payment attached. Perhaps Google may go against conventional wisdom and declare a dividend?
One thing that is traditional about the Google IPO, though, is the float. The float is the number of shares freely tradable on an exchange.
In an IPO, the float is usually small. This means it is easier for investors to push the stock up or down. Look at the recent IPO of Salesforce.com
With the expected large valuation of Google, the float is relatively small: 24.6 million shares. Combine this with the emerging power of hedge funds and their obsession with short-term trading opportunities, and a stock like Google is likely to be quite volatile.
Eventually, the float for Google will expand, but this could take a year or so. In the meantime, unless you have a strong stomach and a willingness to speculate, Google is probably not your stock.
Fool contributor Tom Taulli is the author of The EDGAR Online Guide to Decoding Financial Statements . He does not own shares in any of the stocks mentioned.
Shameless Plug: 3-in-1 Credit Report
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Amazon's Got Game
If you thought that Toys "R" Us
The popular video game retailer has teamed up with Amazon to roll out its new online storefront. The move is unusual in a couple of ways. First, it adds fuel to the fire of the Toys "R" Us claims that it is paying up for exclusivity, even though video games were never really the issue in the legal scuffle.
Yet the real fireworks lie not in the details but in the bloodline. Do you know which company spun off GameStop and still retains a meaty financial interest in the venture? Well, it's Barnes & Noble
Yet the real winner here -- beyond whoever collects on having to keep Amazon's deservedly elevated ego in check -- might actually be Electronic Arts
With EA's chances of growing the online base of Sims users -- and collecting $9.99 a month after the first trial month -- all but certain, it's not Rockem or Sockem that stands to ultimately land the knockout blow.
Both Amazon and Electronic Arts have been worthy Motley Fool Stock Advisor recommendations in the past.
Longtime Fool contributor Rick Munarriz has been an Amazon customer since the 1990s, but he does not own shares in any of the companies mentioned in this story.
Discussion Board of the Day: Amazon
Can a retailer succeed online without going through Amazon? Yes, there are quite a few out there, but is it a viable strategy, or is it best to just embrace Amazon? Share your views with other Fools in the Amazon discussion board.
Apple's Cellular Future
If you've tuned out Apple's musical mania, then you've probably been living under a rock. The company's recent earnings were a testament to the popularity of the company's iPod, as well as online music site iTunes, which is seen as a catalyst for the iPod devices.
In the companies' press release, it was pointed out that the 1.5 billion cell phone subscribers anticipated to be toting mobile phones by the end of this year represent a large opportunity for Apple's musical ventures. Sure enough, it could be a good way to funnel in users who are not quite ready for the iPod or iPod minis and give them a taste of the lure of music on the go.
And with hands-free laws meaning more and more people will be using earbuds, headsets, and other accoutrements that take the hand out of handset, the more it makes sense that music over cell phones could be a popular service. (It might even make a little more sense than Microsoft's
On the cell phone side of things, many market research firms have forecasted a hot market for musical ring tones. It stands to reason that if such ring tones are a hot commodity with young people, the ability to listen to music via cell phone is almost a shoo-in for success.
It's also yet another sign that cellular handset providers, such as Motorola and archrival Nokia
As Foolish contributor Tim Beyers recently pointed out, Apple's iTunes, though popular, hasn't really functioned as a revenue generator but rather a way to sell iPods. However, regardless of the hype, it's certain that loads of competitors will soon be having the same idea.
Alyce Lomax doesn't own any of the stocks mentioned in this story.
Quote of Note
"Even if you're on the right track, you'll get run over if you just sit there." -- Will Rogers
More on Fool.com Today
Dayana Yochim says that when it comes to money, women are on their own in Do Portfolios Need Title IX?.... In You Can Beat the Market, Shannon Zimmerman explains why you don't have to invest in the "typical" mutual fund.... Oakmark's Bill Nygren shares his opinion on Time Warner, Sprint, Xerox, and more in Is Time Warner Undervalued?
In other news:
For a list of all our stories from today, see our Today's Headlines page.