Silicon Valley - Dan Gillmor's eJournal - Google's New Price Absurd! If you asked Dan why he felt like $130 is too high, but $80 is more sensible, you'd get the most ridiculous answer you've ever heard, because he has no idea. In fact, they cut the number of shares being offered as well! Danny, why shouldn't that RAISE the stock price? What if they reduced it to one share only? Would you buy that for $2.5 M? I bet you would... now that it's actually trading the market will evaluate the true value of the company. But Dan's point still seems nuts. Even as it's trading right now, its market capitalization has a ton of emotional connection and future speculation as to growth built in. The numbers call this out... most valuations show that the price should be much lower if based on fundamentals only. What is Dan judging the actual value based on? Cash flow? P&E? Let this be a lesson that having absolutely no clue whatsoever has never stopped anyone from having an opinion (myself included!)
