|
|
 |
Sign Up: Free Daily Tech E-letter
|
|||||
Google Sets Price Range for Public Offering
Washington Post Staff Writer Monday, July 26, 2004; 3:20 PM
Google Inc., the most hotly anticipated initial public offering of the year, revealed today that it had robust profit and sales growth in the first six months of this year and said its stock will trade under the ticker symbol "GOOG" when the company goes public. In a filing with the Securities and Exchange Commission, the popular search engine giant disclosed that profits soared in the six months of 2004, to $143 million compared with nearly $58 million in the same period last year. Sales reached $1.4 billion, up from about $560 million in the same period last year. While computer users around the world access Google to search the Internet for information free of charge, the company derives virtually all of its sales and profits from ads that accompany the search results. Google estimated a price range for its initial public offering of $108 per share to $135 per share. However, investors wishing to purchase stock in the special auction that will be held will have the right to bid above or below those levels. The company, which has sought to make its stock available to the widest possible group of individual investors, intends to disclose more information later on exactly how investors can bid and how the auction itself will work At the share prices proposed by the company, the popular Silicon Valley-based company would have a stock market valuation of about $30 billion, setting a record for an IPO and giving it a valuation greater than many established technology companies. Google still has not set a firm date for its IPO, but the company's lawyers are working closely with the SEC in an effort to get the deal to market. With competition increasing from Microsoft for providing searches of the Internet, the company is eager to sell stock in the public offering soon. However, SEC approval is required before it can proceed. In the IPO, Google said 24.6 million shares will be offered to investors. Of that total, 14.1 million will be sold by the company and 10.5 million will be sold by existing stockholders. Google estimated that it will reap about $1.6 billion itself from the offering, with the total offering valued at an estimated $3 billion. When the sale is completed, roughly 9 percent of Google will be publicly traded, a relatively small proportion. Google, in its statement, said this factor as well as the structure of ownership will leave the company firmly in the control of its existing officers and directors. It will also make it difficult, if not impossible, for anyone to take over the company through stock purchases. While "new investors will fully share in Google's long term economic future," the company said in its filing, they "will have little ability to influence its strategic decisions through their voting rights." Most companies allow an investment bank to set the share price when they go public. Historically, this has often produced undervaluations in terms of market demand and thus large run-ups in share price immediately after the offering. Google will use investment banks to handle sales but will not allow them to set the price. The lead banks handling Google's IPO are Morgan Stanley and Credit Suisse First Boston, according to the SEC filing today. This morning, many computer users accustomed to visiting Google.com to search the Internet ran into problems using the service. After putting information requests into the Google search box on its home page, the normally lightning fast response to queries instead was replaced by an error message. Company officials said this afternoon that a virus had created the problem. "The Google search engine experienced slowness for a short period of time early today because of the MyDoom virus, which flooded major search engines with automated searches," said David Krane, a spokesman for the company. "A small percentage of our users and networks that have the MyDoom virus have been affected for a longer period of time. At no point was the Google Web site significantly impaired, and service for all users and networks is expected to be restored shortly." Andy Beal, vice president of keywordranking.com and an industry expert, reported online that other search engines, including Yahoo and AltaVista, also experienced slowdowns today.
Staff writer Fred Barbash contributed to this article.
About TechNews.com | Advertising | Contact TechNews.com | Privacy My Profile | Rights & Permissions | Subscribe to print edition | Syndication |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
