Google IPO: Tread lightly, weM-Fve been down this high-tech road before

The Leckey File

Your Money

August 29, 2004

With apologies to Samuel Beckett, author of the play Waiting for Godot in which two tramps hold a roadside vigil awaiting arrival of M. Godot, this was the summer of Waiting for Google.

Three long, confusing months transpired from the time the search engine filed its initial public stock offering until it became reality through its unconventional Dutch auction. We repeatedly saw the IPO draw closer, then stall because of corporate miscues and regulatory red tape. Not only was the price reduced, there was even a delay because of a Playboy magazine interview.

Nonethel e s s , numerous Google Inc. employees became paper millionaires when the stock price rose 18 percent the first day. So did other investors. Investment bankers will make a fortune from future employee stock sales and potential acquisitions by this prosperous company. Despite inherent IPO and technology volatility, Internet potential remains a powerful aphrodisiac.

WhatM-Fs next? Last time around, jealousy, greed and impatience overtook average investors who coveted quick riches from technology. When the bubble burst, it resulted in plummeting retirement accounts, pensions and college savings plans.

Tech should ideally make up no more than 10 percent to 15 percent of an individualM-Fs portfolio. IPOs are usually a crapshoot, with high initial prices later falling to earth, so theyM-Fre best considered on the secondary market. Paying dearly for speculative opportunities is fine as long as you donM-Ft stake your familyM-Fs future on them. WeM-Fve walked down this road before and know where it leads. Tread lightly.

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