BOSTON (CNN/Money) -
For a company that says its No. 1 mantra is "Don't be evil," Google sure has engendered a lot of animosity over the past couple of weeks.
The PR folks there must be reeling from all the negative news, even as they keep silent to comply with Securities and Exchange Commission pre-IPO mandates.
We've seen quite a bit of Schadenfreude during the past four years. There was much glee surrounding the misfortunes of the dot.commers, and even more joy arose as self-enriching corporate executives did perp walks.
Through it all, Google stood above the fray, basking in good -- no, glorious -- press as it announced its intent to go public. Somewhere along the way to raising $3.46 billion, however, Google pissed some people off.
Where are the cranks?
The angry party doesn't seem to be short sellers -- though you'd think they'd be anxious to knock down the stock, especially since investors are hammering tech stocks right now. Short sellers borrow stock and sell it, hoping to make a profit by buying back the shares at a lower price.
I checked in with a few. Most said that it's still too early to assess the short interest and that with all the hype surrounding the stock, combined with the IPO's focus on the retail investor, there's no way to know how this stock will fare out the gate. Others disagreed.
"I know a lot of hedge funds that are salivating at the opportunity to short Google," says Scott Rothbort, president of LakeView Asset Management.
ShortPicks.com manager Varlin Zapata says he won't advise his site's subscribers to short the stock, but he points out that the IPO will be "released during red markets," the wave short sellers have been enjoying for four months.
"That may help to increase the selling pressure after the IPO," he says.
Going Dutch
That's pretty innocent talk from a cold and callous crowd. My guess is that the people who are really upset with Google just happen to work on another part of Wall Street. Many of the large investment firms have a vested interest in seeing Google's IPO founder.
Why? Because the company went with a "Dutch auction" format, and that's a threat to the cozy system maintained by the investment banking establishment. If Google's IPO goes well, it'll set a bad precedent: The banks won't get an enormous cut of the fees, and they won't get shares they can "flip" for profit.
Interestingly, the negative stories reporting soft interest in the stock all appeared within a 24-hour period starting on Aug. 5. Almost all of the bad press was attributed to anonymous sources. I'm not a conspiracy theorist, but the sudden burst of news from multiple outlets bore all the marks of a vendetta.
I'm not the only one who thinks this."There's a backlash from the Street -- a well-orchestrated campaign against Google -- and it's insidious," says Patrick Byrne, CEO of Overstock.com. "The ubiquity of [the negative stories] and that they all manifested on the same day? I smell a skunk."
Street backlash
Byrne's no conspiracy theorist either; he knows from which he speaks. Byrne's company used a Dutch auction to go public in 2002, and it immediately felt the wrath of the Street.
"We were warned by big banks that if we [went public via Dutch auction], there'd be retaliation. Most said no one would ever talk to us, or pick up coverage. They've been true to their word on that."
Despite all the negative publicity that has plagued the company recently, Google's popularity and sheer size mean that it has a chance to thwart the Wall Street system.
Overstock's Byrne is rare in that he'll go on the record with his anti-Wall Street tales, but he's not alone in his sentiments. I've spoken to many CEOs who share his frustrations with the Street's machinations. He'll be cheering loudly for Google's success from the sidelines, while other hope quietly that the stock does well.
"Google can put a torpedo below the waterline at Wall Street," Byrne says. "All we could do was throw a hand grenade."
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