As should be zero surprise to anyone who has spent any time around the everyone-for-themselves brokerage business, the WSJ is reporting this morning that the bidding rules for the Google IPO vary from firm to firm. As the WSJ points out, the upshot is that the inconsistent rules favor some brokerage customers over others. So much for a level playing field, but customers of the following firms might reconsider using them as the platform for bidding on Google shares:
Among the distinctions: Most underwriters will allow investors to make an unlimited number of bids for Google shares. However, UBS AG’s UBS Securities, Charles Schwab & Co. and Fidelity Capital Markets are limiting account holders to a single bid. E*Trade Financial Corp. is limiting account holders to five bids but is holding the aggregate bids to 10,000 shares per account. Ameritrade Holding Corp. is letting its account holders bid as many as 30 times.
Then there is Bank of Montreal’s Harrisdirect, which has another wrinkle for Google bidders. Investors with accounts at the firm must bid for at least 100 shares, far more than the five-share minimum Google had imposed. That means that investors there have to be prepared to plunk down $12,150 apiece for a Google stake, assuming the deal prices in the middle of the range estimated by Google of $108 to $135 a share. Making a bid for that many shares may be an advantage for Google die-hards because the size of each investor’s bid will be taken into account by Google when it doles out allocations.