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September 18, 2004

Google - the Oakland As of IPOs

By all accounts, Google's recent IPO was hugely successful (eg see Surowiecki on the Google IPO).

But Google made one big mistake, at least in the eyes of the big investment banks - it didn't bring in one of the big investments banks to manage the deal.

So guess what, the investment banks all missed out on the biggest deal of the last few years. And guess what, they, and the major financial commentatorst are scrambling to find new arguments to support their theory that Google's IPO was a failure.

Here is the latest from Forbes.com.

Since reading Moneyball earlier in the year, I keep seeing examples of Lewis's analysis everywhere.

The analysis of Google's IPO is another one. Google found an inefficiency in the market and exploited it. The people who benefit from the inefficiencey (in this case the major investment banks and the financial commentators) either try to write off the success as a fluke or perversely argue that the success was in fact a failure.

It is an exact parallel to Moneyball's Oakland A's (the second poorest team in the [baseball] major league who came within a few outs of knocking the New York Yankees out of the playoffs). The other teams argued that the Oakland A's were a fluke and that in fact, despite coming so close, their failure to win the title proved that they were no good after all.

You either have to laugh or cry.

Posted by chriscurnow at September 18, 2004 2:22 PM

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