Colorado Buffalo Stampede

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JUNE 10, 2010 — Came across an article today about the University of Colorado leaving the Big 12 Conference. The article, titled “Buffaloes Start College Realignment Stampede” (article by Greg Hall at KC Confidential is no longer online) reminded us of a more literal stampede by a singular Colorado Buffalo many moons ago. (Can one buffalo stampede? Ralphie can!)

While a sophomore in college in 1987, I saw an ad in Mizzou’s student newspaper for Truman the Tiger mascot tryouts. Because I didn’t have a test or anything else important until the next day, I decided to give it the ol’ college tryout. Lo and behold, the childish antics practiced to perfection in high school (which teachers so wrongly predicted would get me nowhere in life) actually paid off and I was selected to the Spirit Squad as one of the Trumans. My parents, I’m quite sure, had to be so proud that their tuition money was going to such good use. Actually, though, I did get awarded class credit for it each semester. And, I needed every “A” I could get.

Someday, I’ll write a book (working title: “Tails of a College Mascot”) about the whole experience, so I’ll save some details and skip forward to my first road football game as Truman. It was Nov. 7, 1987 in Boulder, CO. Though it was a long, long bus ride from Columbia, MO, it was worth it. Boulder was a great town, and the Spirit Squad had a lot of spirited fun (more on that in “Tails”).

So on to the game.

I’m not tough guy, mind you, or I would have put on the pads and been a football player, not put on big feet, a tail and a large head as an animated tiger. But when you put on that Truman suit, it kind of changes you. You’re on stage. You’re tough. You won’t back down from Cornhuskers or Wildcats or jayhawks or Nittany Lions … nothing. So in the pre-game festivities at Colorado that cool fall day, Truman marched around Folsom Field like he owned the place, messing with Chip (his Colorado costumed counterpart) and haranguing a university police officer enough to where he peered out over his cool mirrored sunglasses and grumbled, “Better get away from me, Tigger.” But I (I mean Truman) was tough. The cop didn’t scare me.

Shortly after I harassed the cop, a gentleman in cowboy boots, chaps and a Stetson come over to tell me to get off the field. “Say what?” … did he know to whom he was speaking? Truman had already spent considerable time pestering Colorado’s cheerleaders, Chip the mascot, police officers, etc. … he wasn’t vacating the field for some urban cowboy.

“Move,” the cowboy told me again. Playing to anyone in the crowd who may have been watching, Truman didn’t budge. He’s tough. So the cowboy came over real close and proceeded to tell me: “Look, we’re fixin’ to unleash a 1000 lb. real, live buffalo here in a moment. Six of us are going to lead her around the field and several of us will help try to keep her headed in the right direction. And, if we can keep control, we’ll bring her right by this spot and into her trailer down yonder.

“Now, if we can’t control her, she’s liable to go after the biggest, brightest thing she sees, and with that goofy head on you’re about 6’5” and a very bright yellow. I suggest you move.”

Did I mention that, underneath that costume, I’m not very tough?

Truman got off the field right quick and bravely hid behind one of the cheerleaders. Sure enough, shortly thereafter a big ruckus broke out and here comes Ralphie III leading the Colorado Buffaloes football team onto the field, six guys hanging on to her for dear life (including my new-found cowboy friend). Right by us she ran down the visitors sideline and headed for her awaiting trailer.

I should add that Ralphie III is no name for a lady. Apparently Ralphie I started out as Ralph, but a smart Colorado undergrad discovered that he was a she, so Ralph became Ralphie. As of this writing, they are up to Ralphie V now. Our game actually marked the debut of Ralphie III, as II had just passed. If you are so inclined, you can read all about it on the Ralphie the Buffalo page.

But I digress …

Anyway, Ralphie runs by and, back to full tough guy mode, Truman pushed the cheerleader who was protecting him aside and ran in hot pursuit of the buffalo. Her handlers ran her into the trailer and, as soon as the gate slammed shut, Truman jumped on the side rails and “gave Ralphie the business,” flexing his tiger muscles and thumbing his nose at her.

Truman was having a grand time, playing to the Tiger fans in the crowd and getting a few good laughs. Then the cowboy dudes intervened. “Oh, a tough guy, huh. Well how about you go in there with her.” They sounded very, very serious. My heart sank. Remembering that the cowboy had said she’ll go after the biggest, brightest thing she can find, I thought I was dead. Buffalo food. And no one would probably help, thinking it was some sort of funny mascot routine.

“Look, Mommy. The buffalo is eating Truman.”

“Don’t worry, honey, it’s just pretend. Isn’t Truman funny?”

The cowboys took Truman to the trailer gate, opened it a little, swung him by his hands and feet like you do a little kid, and counted like they were going to let him go on three. 1 … 2 … 3 …

And they didn’t throw Truman in. Of course not. They wouldn’t throw a big yellow tiger in with a real live buffalo. But the thing is, I wasn’t so sure at the time. They were talking a lot of smack and seemed intent on the guy in the tiger suit taking on the buffalo in the trailer. And I was very convinced that my first road football game as Truman was going to be my last appearance ever.

But, as mentioned, they didn’t throw me in and Truman survived to fight another day, spending the rest of that day being my tough guy self. Except around the cowboys. We shined their boots and made nice. You just never know.

Looking Back at the 2004 Google IPO

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When it comes to search engines, we’ve had a lot of experience. Having implemented online optimization and marketing campaigns for our clients for a decade now, we’ve been around since the early days of the industry. And it was clear from the beginning that Google was — and is — ahead of the field.

That’s why it is hard to look back and realize we didn’t follow our gut instincts and buy into the Google IPO nearly six years ago. Here’s a look at what GOOG has done in that time:

So what brings this up now? In a recent Harvard Business Review article, Google CEO Eric Schmidt offered his first-person account of the “quirky IPO,” from the Founders letter by Larry Page and Sergey Brin to the Google Guys interview in Playboy (we hate to link it; just Google it!) that almost derailed the process to the unique Dutch auction concept that aimed to help allow the little guy to get in on initial shares.

And we were in on every step of the auction bidding process. Until we were out.

So we thought it might be a little fun to take our own look back at that process, which started in January 2003 when we first contacted our Morgan Stanley broker to inquire about Google going public. We followed up in November of that year when we heard the company was getting closer to going public and that Morgan Stanley had been tapped to lead the way. Keep us in the loop, we said, as we’ll be buying shares.

By January 2004, we were really all over it. News was out that Morgan Stanley and Goldman Sachs would indeed be managing the Google IPO. We’re in. Our only concern was: How many shares would we be allotted? We knew we couldn’t afford much, but it would be fun to participate.

In April 2004, Google filed for the offering. By July, things were moving along and Google had outlined a “Dutch auction” process that prospective investors would have to navigate to purchase shares of the company. First, we had to go online to the Google site and register to get a bidder number for the IPO. We did. Number 0126-6035-3855-2803-4600. That gave us the right to participate in the auction process, in which each investor could tell Google how much he or she was willing to pay per share and how many shares he was willing to buy at that price.

Mr. Schmidt said this process would allow his company to “do a better job than the traditional approach of setting a price for our shares – and would allow our share price to remain stable after we went public.” In other words, the large institutions couldn’t hoard all the shares, then flip them at a huge profit at the opening bell as the stock started trading and the small investors got their first chance to buy. Theoretically, the little guy would have as much of a chance as the big boys, and Google would not leave any money on the table at the offering.

So now that we had our bidder number, it was time to bid. The company initially came out with a suggested bid range that went up to about $140. The Dutch auction process is complicated, but the general concept is that the company takes bids on what investors are willing to pay and the amount of shares they would buy at that price. Each bidder can even offer a range of prices they will pay and shares they will buy. Mr. Schmidt says the company could then “move down from the top bid until it reached the highest price at which it could sell all the shares it wanted to offer.” So if it had enough orders, it could sell all shares at $140. If not, it would move down the list until it reached a price where all the shares would be purchased. Everyone who bid that price or higher would get the shares at that price.

So here was the chance we had waited for. We’d already been working in Search Engine Optimization for some time and had dabbled in the AdWords bidding process for our clients, an online auction if you well that somewhat resembled the Dutch auction. As a result, we (like so many others) were convinced that Google was the best positioned search engine in the market place. We wanted to have a little bit of equity in the company. Make no mistake, we didn’t have a lot of money, and what we did have for retirement and our young children’s college funds we didn’t usually “gamble” on stocks. Instead, we mainly invested in mutual funds and hoped to watch those investments grow slowly over time.

But in this case, we decided to make up to a – gulp — $10,000 investment. So we bid on 25 shares if the price at which Google went public was $140. If it ranged down to $125, we’d buy 25 more shares (50 total). At $110, we’d buy 25 more (75 total). And if it went to the low end of the estimate at $100, we’d go with a round lot (100 shares) and invest the full $10,000.

We put in our bid and waited to see what happened. Which was nothing. Instead, the range for the offering was lowered to a top end of $135. That’s okay, we’re still in. But clearly Google had to lower the bids because not enough folks bid high enough to cover all 20 million or so shares being offered in the initial range. What did the savvy investors know that we didn’t?

Anyway, we put in our bid again in the lowered range. Starting with 25 shares at $135, down to 100 shares at the lowest end. And once again, they didn’t end the auction. Meaning that, even at the lowered price, Google and its investment bankers couldn’t get enough bidders. So, the range was lowered. We were still in – we love Google, remember? – but we were getting very jittery. Why were we willing to pay up to $140, but not enough folks were even willing to pay the previous low end of $108 to buy up all the shares? We put in our bids again, down to $90, but we weren’t near as confident in our decision.

Then it happened. They lowered the pricing again. To a range of $85-$95 per share, or 60% of the initial price we were willing to pay. So if we liked the company at $140, we must really love it at $85, correct? What we should do now is double down, put in $20,000 and enjoy a good investment over the coming years. Sure, the stock price might go down initially. But Google is such a good company, the investment will pay off in the long run. And we’re long-term investors, so let’s go for it, right?

Wrong.

We called our broker and dripped out of the auction. We’re not in for any shares of Google. Not 25 shares at $140, nor 50 shares at $115 or 75 shares at $100 … not even 100 shares at $90, which had been our final offering on the low end. Nope, we don’t want any shares at $85. Though in our gut we just knew that Google was the major player in the ever-expanding field of search, we worried that all the smart money folks had driven the price down, so there must be a reason. Surely the stock was going to go down, not up, when it started trading.

The rest, of course, is history. Initial investors received their shares at $85 in the IPO. The first public trade of GOOG on that first day (August 19, 2004) was $100, which is about where the stock closed that day. So a 100-share investment at $85 ($8,500) was already worth over $10,000, a gain of 18%. As you know, it gets worse from there (worse, that is, if you didn’t buy any shares). At its highest point in late 2007, the stock reached $714.87 per share, meaning that initial $8,500 investment would have been worth $71,487, about 8.5 times the original investment.

Of course, we probably would have sold long before the $700+ peak. But you get the point. We really wanted to be a part of the unique IPO. We were willing to invest at $140 per share. But we couldn’t pull the trigger at $85 per.

We often wonder how many small investors there were who, like us, wanted to be involved but got skittish and backed out as the big money drove the price down. Did Google accomplish its stated goal of letting everyone participate? In the end, the answer is probably yes, at least to a degree, though the company didn’t accomplish its goal of not leaving money on the table. With the IPO priced at $85, remember, but the first bids coming in at $100, Google could have made 18% more for the company. Just like we look back with a little regret, we guess Mr. Schmidt and Company may as well. But with the stock currently hovering around $500 per share, that regret likely passes pretty quickly. Ours lingers.