Capital Markets

Google Prices at $85

The Internet-search company also scaled back the size of its long-awaited issue and made a partial retreat from the Dutch-auction bidding process.
Ed ZwirnAugust 19, 2004

The wait is over. Google, Inc’s. long-anticipated initial public offering (IPO) was approved by the Securities and Exchange Commission late yesterday, and the stock price was set at $85, according to company officials. The market value for the six-year-old dot.com company is calculated at $23 billion — less than originally expected, noted a report in the Associated Press.

Earlier on Wednesday, officials at the Internet search engine company announced that the IPO’s estimated stock price range would be cut to between $85 and $95, down from its original estimate of $108 to $135.

While Google itself will still be selling the more than 14.1 million shares promised in the offering, selling shareholders have scaled back the shares they expect to sell to about 5.5 million shares, cutting the total number of shares to be sold to 19.6 million from 25.7 million.

Further, in something of a retreat from the egalitarian Dutch auction method of offering the shares Google originally proposed, the selling shareholders have granted the underwriters the right to buy about 2.9 million additional shares of Class A common stock at the initial public offering price to cover over-allotments.

In earlier filings, the company had said that co-founders Sergei Brin and Larry Page would each sell about 1 million of their shares, which would have generated $117 million for each based on the midpoint of the old range.

Google also said in the amended prospectus filed Wednesday that the SEC “has requested additional information concerning the publication” of an interview of Google founders Sergey Brin and Larry Page that appeared in September’s issue of Playboy magazine, a potential violation of the SEC’s “quiet period” rules, according to AP.

The AP reported that before trading begins, Google and its underwriters must announce the share price of the initial sale, notify winning bidders and allocate shares. So far, there is no indication of when that will happen. However, The IPO, announced in April, is pricing into a weak market. Roughly 60 percent of this month’s IPOs have priced below their estimated range, Reuters reported, citing Thomson Financial.

Google is expected to debut on the Nasdaq Stock Market today under the symbol GOOG.