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| The sale of Google shares will make some people
very, very rich (Agencies) |
Google's initial public offering has been priced at $85 a share, much
lower than earlier estimates of up to $135.
US regulators on Wednesday approved documents relating to the flotation
of the internet search engine, and shares could start trading on Thursday.
The sale of 19.6m shares - lower than the planned 25.7m - will raise
$1.67bn in the fourth largest US IPO this year.
The move is likely to have been needed to revive interest as stock
exchanges around the world come under pressure.
The Securities and Exchange Commission signed off relevant paperwork on
Wednesday, enabling Google to proceed.
The price values Google at $23bn, significantly less than the $36bn
projected at the higher share price.
With the rewards set to be less, Google founders Larry Page and Sergey
Brin are selling a smaller part of their stake, with other executives also
holding on to more of their stocks.
"They recognised that there wasn't the appetite for shares," said
Hilary Cook, an analyst at Barclays stockbrokers in London.
The planned flotation ,
watched with keen interest around the globe, already has encountered some
problems.
It was delayed after the SEC took longer to sign off the necessary
paperwork than previously expected.
With SEC approval achieved, Google will stop accepting bids for its
shares and could start issuing stock within a matter of hours.
The lower price, however, means the number of shares being sold also
has been cut.
According to a statement on its website, Google said that "selling
shareholders" would now offer 5.5 million stocks, less than half the
amount they first planned to offload .
Among those offloading a portion of their stock with Mr Page and Mr
Brin are a number of other company executives and the venture capital
firms which helped fund the company's expansion.
Google has been offering shares through a "Dutch auction" designed to
give small investors a better chance of getting their hands on its stock.
Potential buyers are asked to specify both the price they are willing
to pay, and the number of shares they want.
The bids are placed in order, starting with those offering the highest
price. The allocators work down the list from the top, allotting each bid
in turn the shares it requests, until all the shares available have been
accounted for.
The lowest successful bid then becomes the issue price, and the
flotation can begin.
Google will trade on the technology-heavy Nasdaq exchange.
The company does, however, have a couple of clouds on its horizon.
Google revealed on Monday that the US stock market watchdog had
launched an informal inquiry into its failure to register shares given to
employees.
The probe centres on a possible breach of US stock market rules arising
from the firm's failure to register 23 million shares and 5.6 million
share options it offered to employees and consultants.
(Agencies) | 
Updated: 2004-08-19 14:23