Editor's Note: This article was originally published at 10 a.m. EDT on Real Money on Aug. 19. Sign up for a free trial of Real Money.
Google (GOOG) just celebrated the 10-year anniversary of its initial public offering. There are lots of lessons here.
First of all, I remember exactly where I was when Google went public. I had just taken over the ETF desk at Lehman Brothers. I was sitting in the back of the trading floor, back up against the staircase, and I had something of a vista, looking out over cash and derivatives and programs and everyone else. If you recall, Google had a direct-to-investors online offering. I don't remember the details of how it worked, but it wasn't a firm underwriting. I also seem to remember Google raising some multiple of pi amount of money, like 3.14 billion or something like that. This was back when Google was a lot funnier than they are now.
The stock was offered at $100. In the first few seconds of trade, it plummeted to $96. The whole trading floor said "ooooh." This wasn't a surprise, though -- the Street had been very bearish on this quirky company that was, after all, just a search engine raising all this money. But what happened next is what surprised everyone. It rallied, back through $100, and went higher throughout the rest of the day. It never saw that price again.
Wall Street continued to hate the stock. The shares went higher and higher. It was just a search engine, they said.