HOW TAKING THE PACKERS IN THE SUPERBOWL REMINDS ME OF GOOG WHEN IT IPO’D
The GOOG ipo in 2004 was an event. I was in Sweden at the time visiting family. I remember a bunch of us huddled around the computer waiting for it to open. I was running my hedge fund at the time and I had absolutely no interest in the stock. Like the majority of Wall Street I thought that $100 for a company that had anything to do with the internet was absurd.
You have to keep in mind what investors in the markets had been through the previous few years. The bursting of the internet bubble was a catastrophe for investors. Internet stocks at the time GOOG went public ranked right down there with Nigerian chain letters and DeLorean Motor Company as marketable investment ideas. People had seen their wealth evaporate as a result of these stocks. So when GOOG - an internet company - came out at $100 per share, people were immediately reminded of the madness that was the internet bubble.
That was the trap...the diversion...the contrarian play. That was the reason GOOG went up multiple hundreds of percent in the years that followed. The premium that was charged for GOOG made a lot of investors, both professional and amateur, take the other side of the trade. Taking the other side of the trade in the stock, fueled the runup for the first year, as investors were caught with their pants down. They were eventually forced to cover shorts and/or buy into the stock at a heavy premium to the offering price. Only after the massive runup did investors finally begin to realize what a force GOOG was.
The Packers in the Superbowl, being favored by 3 points, reminds me a lot of the GOOG premium on its IPO date. Just like GOOG in the first year of its public life there will be a lot of people taking the other side of the Packers trade i.e. the Steelers. Just like the GOOG ipo, the odds makers seem to be baiting the huge population of short sellers and doubters (Steelers fans) into taking the 3 points and banking. It seems too easy, just like shorting a $100 internet stock did when everyone couldn't stand hearing the words "internet stock".
The betting public is heavily slanted towards the Steelers. And the Vegas bookmakers are being kind enough to give the betting public 3 points as a gift for playing. Just like the Wall Street bookmakers were kind enough to give all the internet stock haters a $100 stock to short or completely avoid in an era of internet company implosions. You must remember, at the time GOOG came public, people didn't think of it as the Google we see today, people thought of it as an internet company...nothing more.
The Green Bay Packers are GOOG in 2004. A team being sold at a premium to the public who is all over the other side of the bet. Just like doubters were either ignoring, shorting or just watching GOOG from the sidelines in 2004. The doubters are all over the Steelers. Watch the Packers run.
