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	December 18, 2003

CAN GOOGLE CLEAN UP THE BROKERS' ACT? The New Yorker has such a wealth of good writers. This week James Surowiecki explains how Google, which is planning an initial public offering (IPO) of shares, could use the Internet, and a 'Dutch auction' to do so. Not only would that play exactly into the company's strengths, and demonstrate how well the Internet can optimize a market, it would at the same time show how corrupt the existing IPO process is. Under that process, the underwriting syndicate deliberately underprices the shares so that immediately following the IPO the share price jumps -- usually by over 50%. This is called a 'successful' IPO, since it provides a huge financial bonanza to the underwriting companies who can then flip their shares into the market at their real market price and pocket a fortune. Surowiecki quotes two financial experts who estimate that this process effectively bilked IPO companies out of $66B in proceeds that could have been used to build their businesses. Even the NYSE and NASD have acknowledged that this practice is sometimes "unlawful" and often "misconduct contrary to the best interests of investors". It would be wonderful to see yet another greedy large corporate oligopoly's shameful practices cleaned up. It would be even better to see a New Economy company, and investors in a real open market, show how to do it. (If the link above has passed into the pay-per-view archives, e-mail me for a copy -- then subscribe to the magazine) 10:43:51 AM  trackback []  comment []

WE HAVE ALL BEEN HERE BEFORE Three recent quotes from the Iraqi front: "We need to pursue a new strategy of terrorism versus terrorism" -- US advisor in Iraq, speaking last week to Seymour Hersh "With a heavy dose of fear and violence, and a lot of money for projects, I think we can convince these people we are here to help them" -- US lieutenant-colonel, speaking to the New York Times "We are going to have to play their game. Guerilla versus guerrilla." -- US militart expert in Baghdad, explaining the "incendiary" practice of employing Israeli commados and intelligence units to advise the US in Iraq operations 10:39:40 AM  trackback []  comment []

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