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Google IPO News

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Google Gains 18% on Debut

Google, the most closely watched initial public offering this year finally made its debut Thursday and clocked in a hefty gain of 18% by closing at $100.34 per share.

Some 22 million shares changed hands on the day closed narrowly above $100 mark after opened at $100.33 early on. It rised to an intra-day high of $104.46. The day's low was $95.

Google earlier agreed to priced at the bottom of its lowered price band ($85 to $95) - slashed this week from previously estimated $108 to $135 in the face of recent "cooling" on internet stocks, regulatory concerns and investors' uncertainty about the largely untested "Dutch Style" auction.

As the dust settled, Google has raised about $1.66 billion in the IPO process, and ranks as the third richest US-based IPO on the NASDAQ.

Reported from New York, Thursday

Google_Gains_18%_on_Debut

(August 19, 2004)

Google Sets Its Price

(July 26, 2004)

It Is An Auction!

(May 2004)

Google Googling

(April 2004)

Google Sets Its Price (July 26, 2004)

Google finally set its IPO price at $108 to $135 per share for 24.64 million shares according to document filed Monday. The Internet search engine also disclosed in a filing with Securities and Exchange Commission that it plans to trade its shares on Nasdaq under the ticker symbol "GOOG" on August 9.

Under the present scenario, the Mountain View, CA company would have a market value of $36 billion not far off Yahoo!

Morgan Stanley and CS First Boston are lead underwriters on the Google deal.

The latest documents showed Google earned a first half profit of US$143 mil on sales of US$1.35bil. That compared with a $58mil profit last year on $559mil of turnover. Cash on hand grew to an astonishing $548mil as of June 30.

Google with a workforce of some 1,900, derived almost 97% of its revenue from advertising something the company calls "paid-search" that direct ads to customers base on their web searches.

Founders Sergey Brin and Larry Page will offer 962,000 shares each. At mid-range price, that would gross some $117mil each in the IPO.

It Is An Auction! (May 2004)

Google is so widely used and admired that it has a big legion of fans. Its popularity gives the company much leverage in negotiating its IPO deal, and as if it should be, the rules for Google's share offering is not going to be straight forward. It plans to auction of its share within a certain price range and thus enrich the company rather than the investment bankers and their favoured clients.

In a nutshell, there will be no fixed price for the shares to be sold at the IPO. Instead, there will be a Dutch-styled auction, in which Google will capture all the first-day bounce by selling direct to the speculators at prices set by the biggest bulls in the crowd.

In a letter to prospective shareholders, Google founders Serger Brin and Larry Page said they are adopting this new sales method to see to it that the price will be fair. If necessary they say they will "create a sufficient supply of shares to investor demand in part by selling a fraction of their own shares and by encouranging other pre-IPO shareholders to sell some of thier shares. "The more shares current shareholders sell, the more likely it is that they believe the price is not unfairly low". The founders said.

So what will happen to Google shares? They will "achieve" a relatively stable price on the day following the IPO, so that buyers and sellers receive a fair price at the IPO. By investor watch best comment, Google will be a success but boring to say the least. All the fun and profit (and loss) of a roller coaster rides that follow this much hyped IPO are gone fo good at least for now.

Without a chance of quick profit, even the rankest of speculator will turn away from the risk of new companies. Without speculation, venture capitalists won't find their exit strategies and they will be reluctant to put their money into start-ups. Let's think about it.

Atlanta Resource Center

Google Googling (April 2004)

"Do Gooder - No Evil" motto is doing good on the internet this day. Two Stanford graduates have juist decided to become instant billionaires by taking their internet company public ... no...no! This is not a reprint of a 1996 IPO hype.

It sounds like it and you cannot be faulted. Too many of us were taken on that roller coaster ride of the late '90s that even c0-founder - Sergey Brin public announcement that Google will remain committed to making the world a better place is not helpful.

Statistic readers are seeing a different picture. Google ha created the most popular internet search engine, one so dominant that Google has becpme part of Americana. Looking at its IPO paper and thanks to its advertising revenue, Google is highly profitable. With a turnover of over $1.2 bil it has cash position in several hundred millions. This is in stark contrast to many of the ill-fated dot-coms that rushed to go public during the IPO bubble.

Many of those company did so to raise working capital and they did not have a platable cash flow model. Not Google. The sole reason for this IPO is to let employees and investors cash in - one of the venture capital firms that backed the company from early on will see its $3 mil investment returned to billions.

Everything seem nicely conceived and well intended. One must not be carried too far of this hype. Technology business remains technologically driven. Just look at Netscape's current market value. It sure will be interesting to see how Google shape up after the IPO.

Atlanta Resource Center