July 26, 2004 8:21 AM PDT

Google searches for $135 per share

Google has set the long-awaited price range for its initial public offering, putting itself in line to raise as much as $3.3 billion, according to a filing with the U.S. Securities and Exchange Commission on Monday.

The search giant set a price range of $108 to $135 a share, according to the filing. Based on those per-share numbers and the expected issuance of 24.6 million shares, the search giant hopes to raise between $2.7 billion and $3.3 billion. That would make it among the largest-ever IPOs.


Flashback
News.com's related coverage of
Google's long-impending IPO

Google reportedly exploring IPO
tactics
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SEC rule may nudge Google
toward IPO
(Dec. 10, 2003)

Tech IPOs picking up steam
(Dec. 18, 2003)

IPO day may be approaching
for Google
(April 23, 2004)

Google files for unusual
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(April 29, 2004)

Co-founders release Google
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Lifting the lid on Google
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Google's hard bargain
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AOL exercises Google
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Google's desktop bet
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Google names 31 underwriters
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Study questions Google's
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(May 25, 2004)

Google registers to list on
Nasdaq
(July 12, 2004)

Google hit with age-
discrimination suit
(July 26, 2004)


The company plans to list its shares under the ticker GOOG, according to the filing. Google has already registered to trade on the Nasdaq exchange. No date has been set yet for the IPO.

If Google begins trading at $135 a share, it would have a market capitalization of $36.3 billion, according to its SEC filing. That would put it in range with Yahoo, which had a market cap of $37.8 billion in early-morning trading Monday, but far short of Microsoft's $308 billion.

After its IPO, Google expects to have 268.5 million shares outstanding, largely consisting of its series B shares.

After a long, listless period following the dot-com downturn that began in 2000, the market for tech IPOs has been heating up recently. Google's planned venture into public trading has been one of the most anticipated of the bunch.

Other prominent IPOs include the market debut of software specialist Salesforce.com, which saw a quick run-up in its first hours of trading but has since settled down to about 20 percent above its initial price of $11 per share.

In Monday's SEC filing, Google also revealed recent financial results, a key step in preparing for the stock offering. During the six months ended June 30, Google posted revenue of $1.4 billion, up from $560 million in the same period a year ago.

The company's net income jumped to $143 million in the six-month period, compared with $58 million a year earlier.

The public offering is expected to take place via a Dutch auction, which means that investors will offer a bid price for the number of desired shares. The final IPO price will be based on the lowest bid price received that would result in the sale of all 24.6 million shares.

The three-figure price range may not sit well with some potential investors, one analyst said.

"This $108 to $135 price range is a very high share price to drop in the average investor's lap," said David Menlow, president of research firm IPO Financial Network. "Institutional investors--if they feel the offering is fairly valued--don't have a problem investing $200 a share in an IPO. But for the mom-and-pop investor, it's a psychological barrier to pay $108 to $135 to buy a share of stock."

Menlow added, however, that it's unlikely that Google's IPO will sell for less than $100 a share.

While other IPOs have topped Google's anticipated multibillion offering by presenting a larger number of shares, such as AT&T Wireless' $10 billion IPO in April 2000 and Kraft Foods' $8.7 billion offering in June 2001, the Internet company's range is the highest in recent history, Menlow noted.

Previously, biotechnology giant Genentech had one of the highest IPO ranges, at $85 to $95 a share. Ultimately, Genentech priced its IPO at $97, Menlow said.

Meanwhile, Google's general counsel is facing a potential civil injunction from the SEC regarding his former work at educational software applications maker SmartForce, where he served as chief financial officer, according to Google's SEC filing.

David Drummond, who worked at SmartForce from July 1999 to February 2002, was notified by the SEC on Tuesday that its staff planned to recommend the agency bring a civil injunction against him for allegedly violating federal securities laws and antifraud provisions, according to the SEC filing. The issue centers on certain disclosure and accounting issues related to SmartForce's financial statements.

Google noted that none of the allegations involve the search company and that Drummond was hired in February 2002.

The Internet giant is also facing continuing attrition among its underwriters. In its most recent SEC filing, Google no longer lists RBC Capital Markets and SunTrust Robinson Humphrey among its underwriters. Google now has 28 underwriters, down from its initial 31.

16 comments

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Doesn't this defeat their original objective???
Google originally wanted their IPO to be friendly to all investor types (i.e. Dutch auction). Does pricing north of $100 really meet those objectives?
Posted by (4 comments )
Reply Link Flag
It IS investor friendly!
As you no doubt know, investments can go up and can go down. If an investor can't afford to lose $100 then s/he shouldn't be investing. If s/he only has $1 or $10 or £25 to invest, then they're not going to see much dividend revenue from that anyway. And if they do have $100 to invest, then it makes no odds whether they have 100 shares at $1 or 1 share at $100. A $100 per share offering actually protects 'penny-share' investors from themselves.
Posted by (6 comments )
Link Flag
Doesn't this defeat their original objective???
Google originally wanted their IPO to be friendly to all investor types (i.e. Dutch auction). Does pricing north of $100 really meet those objectives?
Posted by (4 comments )
Reply Link Flag
It IS investor friendly!
As you no doubt know, investments can go up and can go down. If an investor can't afford to lose $100 then s/he shouldn't be investing. If s/he only has $1 or $10 or £25 to invest, then they're not going to see much dividend revenue from that anyway. And if they do have $100 to invest, then it makes no odds whether they have 100 shares at $1 or 1 share at $100. A $100 per share offering actually protects 'penny-share' investors from themselves.
Posted by (6 comments )
Link Flag
Google IPO and the election!
Will the Google IPO decide the who the next President is?

It could, with the stock market and economy in bad shape, Google could help bring both back a bit.

Could Google wait until the election is over to keep from helping Bush?

See more coverage at:

<a class="jive-link-external" href="http://www.searchwars.squarespace.com/display/ShowPage?moduleId=19786" target="_newWindow">http://www.searchwars.squarespace.com/display/ShowPage?moduleId=19786</a>

You will find a lot of intelligence at the above website on all Google issues including the IPO.
Posted by anthonycea (103 comments )
Reply Link Flag
Give us a break
Oh for cryin' out loud. Hold back the economy because it will give your candidate a better chance? Stall what may be a popular and successful IPO so that another presidential candidate can claim credit? Capitalism drives America, like it or not. Lets not let our ugly partisan attitudes stall the growth of the economy, please. I don't think you want this to be seen as the "Democratic Way," do you?
Posted by David Arbogast (1709 comments )
Link Flag
Google IPO and the election!
Will the Google IPO decide the who the next President is?

It could, with the stock market and economy in bad shape, Google could help bring both back a bit.

Could Google wait until the election is over to keep from helping Bush?

See more coverage at:

<a class="jive-link-external" href="http://www.searchwars.squarespace.com/display/ShowPage?moduleId=19786" target="_newWindow">http://www.searchwars.squarespace.com/display/ShowPage?moduleId=19786</a>

You will find a lot of intelligence at the above website on all Google issues including the IPO.
Posted by anthonycea (103 comments )
Reply Link Flag
Give us a break
Oh for cryin' out loud. Hold back the economy because it will give your candidate a better chance? Stall what may be a popular and successful IPO so that another presidential candidate can claim credit? Capitalism drives America, like it or not. Lets not let our ugly partisan attitudes stall the growth of the economy, please. I don't think you want this to be seen as the "Democratic Way," do you?
Posted by David Arbogast (1709 comments )
Link Flag
Is Google down,
I can't search!
Posted by bobby_brady (765 comments )
Reply Link Flag
Is Google down,
I can't search!
Posted by bobby_brady (765 comments )
Reply Link Flag
Google to charge from 4/'05?
Has anybody else heard that Google plans to begin charging for all searches from April 2005?

If so, invest in Google now!

At least that may mean your searches from 4/05 might be self-funding! (i.e. what you pay out for searches might be offset by share earnings).
Posted by (6 comments )
Reply Link Flag
They already charge for searches!
Google traffic redirection to ADSENSE publishers websites is a charge, they have been redirecting traffic to their ADSENSE publishing partners since 11/2003

see <a class="jive-link-external" href="http://www.webcenter.squarespace.com" target="_newWindow">http://www.webcenter.squarespace.com</a> and you will see a bit of this "so called theory".
Posted by anthonycea (103 comments )
Link Flag
Google to charge from 4/'05?
Has anybody else heard that Google plans to begin charging for all searches from April 2005?

If so, invest in Google now!

At least that may mean your searches from 4/05 might be self-funding! (i.e. what you pay out for searches might be offset by share earnings).
Posted by (6 comments )
Reply Link Flag
They already charge for searches!
Google traffic redirection to ADSENSE publishers websites is a charge, they have been redirecting traffic to their ADSENSE publishing partners since 11/2003

see <a class="jive-link-external" href="http://www.webcenter.squarespace.com" target="_newWindow">http://www.webcenter.squarespace.com</a> and you will see a bit of this "so called theory".
Posted by anthonycea (103 comments )
Link Flag
Micro$oft by another name
Google has such a huge jump on all other business-orientated search engines that opting out of Google to use A.N.Other free search engine (after Google starts to charge for searches) is not a very valid option.

...so is Google's stranglehold on the search engine function (service) as abhorrent as Microsoft's stranglehold on PC operating system software and office productivity s/w applications???
Posted by (6 comments )
Reply Link Flag
Micro$oft by another name
Google has such a huge jump on all other business-orientated search engines that opting out of Google to use A.N.Other free search engine (after Google starts to charge for searches) is not a very valid option.

...so is Google's stranglehold on the search engine function (service) as abhorrent as Microsoft's stranglehold on PC operating system software and office productivity s/w applications???
Posted by (6 comments )
Reply Link Flag
 

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