IPO\'s the Initial Public Offering

IPO's

The initial public offering for Amazon was first of all priced at $18 a share, but the high demand for the Amazon share made it extremely attractive to the investors. The price went to $29 1/4 at opening time, 62.5% higher, but began to drop soon after and reached 24 and ae at the end of the day, a full $6 ae up from the initially prognosis of $18.

Google initially priced the shares at $85, but again, the shares' attractiveness made it open at $100.01, 17.6% over the initially fixed price. Nevertheless, this was lower than the original filing range, estimated at that time. However, differently from the Amazon IPO, the share price immediately went up to $113.48 and, as we know, it continued to increase over the next couple of years.

While Amazon went public only after a period of three years, Google had been on the market for six years. As such, an important difference is the fact that the company was much more mature on the market, as well as more visible. Investors had been watching Google for some time, they were not only used with the company, but were actually already interested in the company's IPO, so as to be able to acquire shares.

Another significant difference were the financial results of the two companies. Google had reported profits of $191 million, while Amazon reported losses. Obviously, the difference in share attractiveness that resulted from this financial fact was clearly in favour of Google's eventual share growth.