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Google could make market debut wednesday
(Agencies)
Updated: 2004-08-17 08:58

Google Inc. appeared set to start trading on the Nasdaq on Wednesday, after the Web's No. 1 search engine asked regulators for final approval to price its closely watched initial public offering.

Attention immediately shifted to the likely price of the shares in Google's unconventional multi-billion dollar IPO, which is being priced through an auction. Google is selling 25.7 million shares to the public in an auction that began last Friday, and is expecting its shares to price at $108 to $135 each.

The Web search company said on Monday it has asked the U.S. Securities and Exchange Commission to declare its registration statement effective on Tuesday at 4 p.m. EDT.


Former SEC lawyers familiar with the IPO process said that most companies usually price their shares within an hour of having their registration statement declared effective, which allows them to sell shares to the public. If Google prices soon after, the shares would most likely start to trade in the next market session on Wednesday.


Google Inc. appeared set to start trading on Nasdaq on August 18, 2004, after the Web's No. 1 search engine asked regulators on Monday for final approval to price its closely watched initial public offering. The Web search company said it has asked the U.S. Securities and Exchange Commission to declare its registration statement effective on Tuesday at 4 p.m. EDT. Co-founders Larry Page (L) and Sergey Brin are shown in an undated photo. [Reuters]
"It looks like they're all set to go," said Bryan Brown, a partner at Porter & Hedges in Houston and a former SEC attorney.

Google has said in regulatory filings and again on its Web site on Monday that it could accept successful bids for its IPO as little as one hour after it notifies bidders that the IPO document has been become effective.

"This means they're done, and I would guess this means that they're within their range," said Gregg Berman, partner at Fulbright & Jaworski LLP.

An SEC spokesman and a spokesman for Google declined to comment.

AT WHAT PRICE?

Deal watchers continued to speculate on where Google's pricing would land, given the recent downturn in Internet stocks and a flood of negative sentiment surrounding Google over the past two weeks.

"People didn't expect it to happen this early. Somehow demand has come in from somewhere the Street didn't expect, or they're going to do it at a lower price just to get it done," said Francis Gaskins, president of IPODesktop in Los Angeles.

A different interpretation was offered by Connor Browne, associate portfolio manager for the Thornburg Core Growth Fund, which invests $80 million.

"Because of what tech stocks have been doing recently, it is possible that the price will be at the low end of the range," Browne said.

"There is a lot of uncertainty and lots of negative sentiment. Management has made a number of missteps ranging from the lack of guidance to the interview that may have violated U.S. securities rules that came out just as the bidding began."

Nearly a dozen investors and analysts who are disclosing their pricing expectations are predicting that Google's shares will be priced between $70 and $115 per share.

A steady stream of negative publicity, most recently triggered by an interview in Playboy magazine with Google's founders that may have violated securities laws, has also added to worries over investing in Google.

"A lot of people have also been turned off by the Dutch auction process and they are likely going to sit on the sidelines to see how this all ends up," said portfolio manager Browne.

In late July, Google issued financial results for the quarter ended in June showing that quarterly revenue growth had slowed to 7 percent, a sharp contrast to the double-digit gains in all previous quarters since 2002.

Later, the company disclosed that it may have issued more than 23 million shares and 5.6 million stock options illegally, triggering an investigation by California regulators.

Google disclosed in an additional filing that the SEC and other states were also looking into its offer to buy back the illegally issued shares. Google said it expects those shares and stock option owners to forgo the buyback offer and instead have them converted to registered shares at the IPO.



 
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