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IPO Story
Google May Have Violated Law Jeffrey R. Hirschkorn, Senior IPO Analyst, Aug. 5, 2004 Certainly, the elevated terror alert in New York has been a key barometer in the lack of new issue pricing. In fact, the change in status has caused no deals to price so far during the week. Now, comes word that RightNow Technologies (proposed: RNOW) cut talk on its proposed IPO from $9-$11 to $7. Morgan Stanley and Thomas Weisel Partners are managing underwriters. Shares to be sold were reduced to 6.3 million. While, New River Pharmaceuticals (proposed: NRPH) reduced the offering structure on its IPO from $10-$14 to $8. The reduction in price isn�t generally a bad sign, considering New River is going public through a Dutch auction steered by W.R. Hambrecht + Co. The deal still seeks to offer 4.2 million shares. With these reductions in mind, official pricing release should come sometime during the day, sources tell Current Offerings. Now, with regard to Google (proposed: GOOG) and its alleged violation of securities laws. In an amended filing with regulators, the �Net search engine claims that it may have illegally sold nearly $3.1 billion in shares and offered to buy them back for a fraction of the cost. All shares sold, according to officials at the Securities and Exchange Commission, are required to be registered. Further information on this was filed with regulators in a recession offer memorandum late Wednesday. In the filing, Google said that it sold 23.2 million shares to 1,105 current and former employees and consultants. The firm granted an additional 5.6 million options to 301 people. These transactions took place between September 2001 and June 2004. As required, these deals were not registered with regulators. Furthermore, the company said it will pay nearly $26 million to buy back those shares. Some holders, according to Reuter�s, may sue Google rather than take the buyback. By failing to file with regulators, Google has indicated that it may have violated several state laws. This offer will expire in September. No specific date has been set as of yet. Holders of the stock who don�t respond or reject the offer will have shares registered after the IPO is finalized. Will this take away some of the thunder? No one really knows. But, from the small investor it doesn�t leave a real good taste. Plans call for Google to finalize its IPO in the upcoming week at talk of $108-$135. Morgan Stanley and Credit Suisse First Boston are joint book runners on the Dutch auction. Subsequent to the filing of this story, CNBC aired a piece today that indicated Google may delay its IPO until the week of Aug. 16. Company executives, citing quiet period restrictions, refused to comment on the report. E-mail: jeffh@currentofferings.com. |
