Google IPO banker tracks two-decade journey from Silicon Valley upstart to $2 trillion
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Twenty years ago, as Morgan Stanley banker Michael Grimes was helping lead the public offering for the young company behind the Google search engine, one of the most anticipated IPOs of the decade, he was among the first people offered a new email service. He had his pick of any identifier he wanted, so he asked for michael@gmail.com.
Sergey Brin, Google’s co-founder, chimed in. Grimes remembers Brin telling him, “Oh no, you don’t want that. Gmail is going to be big. You’ll be spammed forever.”
Grimes told CNBC he does regret passing up the email address. But the IPO helped cement his reputation as “Wall Street’s Silicon Valley whisperer,” just as the tech industry began to reshape investing globally.
He calls the IPO of Google, which has increased by 7,600% over the last two decades, “momentous.”
The cumulative market value of companies Grimes has taken public is in the trillions of dollars. Some were more tumultuous, like Facebook‘s IPO in 2012, and some pioneered innovative new structures, like Spotify‘s direct listing in 2018. But Google’s was groundbreaking.
“It was the start of the next era,” Grimes said. “Google [and other megacaps that followed] changed the way that we work, live and play. They did it in bigger ways than we all thought and now these are trillion-dollar companies right up at the top.”
Now operating under parent Alphabet, the company is worth more than $2 trillion. No longer just search and advertising, the tech giant counts YouTube, Pixel smartphones, cloud computing, self-driving cars and generative artificial intelligence among its many business units. It’s a technology company so expansive that the Department of Justice may be looking to split it up.
Alphabet wasn’t immediately available to comment.
At the time of Google’s IPO 20 years ago, the tech industry was still reeling from the dot-com burst of the early 2000s and investors were cautious. Rather than going with a traditional offering, Google decided on a process called a Dutch auction, intended to democratize the IPO process by allowing a broader range of investors to participate.
The founders’ IPO letter began: “Google is not a conventional company. We do not intend to become one.” It also introduced Google’s “don’t be evil” philosophy.
Grimes said Brin and Larry Page wanted a level playing field for their IPO: “Their point of view was: Wait, if a young engineer sold some of her vested stock from Cisco or wherever and she wants to put $10,000 into Google, why should she get told she only gets $500 worth or none? Especially if she’s willing to pay one dollar more than the institution.”
“The auction allocations,” Grimes said, “would be determined by price and size. Not by who you are, and that was the fun. That was the fundamental breakthrough.”
Grimes added that some banks and institutions cautioned Google’s co-founders against the unusual process and told them it wasn’t the way things were done. But others, like his team, said they’d build with them.
Winning the coveted “left lead” on the IPO was and still is a competitive race. The Morgan Stanley team embraced the format, built a prototype and tested for a billion bids.
For the road show, they split into three different teams. Co-founders Brin and Page each led their own, and CEO Eric Schmidt led the third.
By most accounts, the IPO was successful. Google overcame a weak IPO market and an unproven offering model to generate a solid first-day return and a market capitalization of over $27 billion. From there, the stock kept appreciating.
But it would take more than a decade for the principles behind Google’s IPO to take off. Consumer technology brands like Facebook (now Meta), Twitter (now X) and LinkedIn (now owned by Microsoft) would go the traditional IPO route. But several of the high-profile listings between 2019 and 2021 did incorporate elements that aligned with Google’s democratizing intent. Airbnb offered hosts the opportunity to buy shares at the IPO price. Uber and Lyft made shares available to its drivers, and Robinhood gave customers access to its IPO.
Assessing the impact of Google’s “don’t be evil” credo — and how it’s aged — is more complicated. Grimes declined to reflect on the Google of today, saying he can’t talk about clients.
Google now stands accused of stifling innovation by U.S. and European regulators, and although the company is at the forefront of the generative AI platform shift, search and advertising — still its bread and butter — is facing its biggest existential threat in decades.
Intel snapped a losing streak of six straight quarterly losses and returned to profitability in the third quarter.
In its first earnings report since the Trump administration acquired a 10% stake in the company, the U.S. chipmaker posted strong revenue, noting robust demand for chips that it expects to continue into 2026.
Client computing revenue, which includes chips for PCs and laptops, grew 5% year over year, benefiting from PC market stabilization and artificial intelligence PC prospects.
CEO Lip-Bu Tan said in a call with analysts Thursday that artificial intelligence “is a strong foundation for sustainable long-term growth as we execute.”
The chip strength and demand were bright spots, but there were areas of concern as well, with the company’s foundry business still needing a big break.
Here are three takeaways from the chipmaker’s Q3 report:
Cash flow
“We significantly improved our cash position and liquidity in Q3, a key focus for me since becoming CEO in March,” Tan said on a call with analysts Thursday.
Intel landed an $8.9 billion investment from the U.S. government in August, along with $2 billion from Softbank, but has not yet received the $5 billion tied to a deal with Nvidia. The company expects that deal to close by the end of Q4.
With all of those transactions completed, plus the Altera sale, Intel will have $35 billion in cash on hand, CFO David Zinser told CNBC.
The U.S. government is the company’s biggest shareholder, and Intel stock is up more than 50% since Aug. 22, when Commerce Secretary Howard Lutnick announced the deal.
“Like any shareholder, we have to keep in touch with them,” Zinser said of the U.S. stake. “We don’t tell them how the numbers are going before the quarter. We generally talk to them like Fidelity,” another Intel shareholder.
Intel 3-month stock chart.
Foundry
The firm’s foundry remains a work in progress.
Revenue fell 2% over the year before, and it has yet to land a major customer.
Intel now has two fabs running 18A nodes, which are designed for AI and high-performance computing applications.
“We are making steady progress on Intel 18A,” Tan said of its latest chip technology. “We are on track to bring Panther Lake to market this year.”
Zinser said the more advanced 14A nodes won’t be put in supply until the company has “real firm demand.”
Old stuff still selling
Zinser said the company’s older chipmaking processes, or nodes, have continued to do well, “and that was probably the part that was more unexpected.”
Zinser said the chipmaker met some of the central processing unit (CPU) demand with inventory on hand, but they will be behind in Q1, “probably Q2 and maybe in Q3.”
The supply crunch has been with older Intel 10 and 7 manufacturing technologies.
Many customers are opting for less advanced hardware to refresh their operating systems, demonstrating enterprises aren’t waiting for cutting-edge chips when proven technology gets the job done.
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