CurrentOfferings.com Story:

Google IPO Could Launch This Week?

David Shabelman, The Deal,, Aug. 11, 2004

Google is ending the registration process for investors wishing to participate in its initial public offering on Thursday and will commence its long-awaited issue "soon thereafter," the company disclosed on it IPO Web site Tuesday, Aug. 10.

The Mountain View, Calif., Internet giant is now expected to launch the so-called Dutch auction as early as Friday and conclude it early next week.

In addition to registering with Google to buy shares, prospective investors also must open a trading account with one of the company's 28 underwriters. Investors must specify the number of shares they wish to buy and at what price. Google will then allocate shares to anyone who has met the clearing price, or the lowest price required to meet demand for all 25.7 million shares on offer.

Google's IPO has bogged down in recent days amid reports of technical glitches and flagging investor interest. Scott Appleby, head of research with WellAuctioned.com, a Greenwich, Conn.-based online financial information provider for IPOs, said Google's offering could price at less than $100. Google on July 26 set a price range of $108 to $135 per share.

"Our numbers suggest people are reticent about a number above $100," he said.

But even if Google does price below that range, the deal should not be considered a disappointment, Appleby said. "It's not a great signal," he said, "but it's easily rationalized considering the performance of the market," noting that shares of Internet rival Yahoo have fallen roughly 10% since Google priced its shares. A similar haircut could take Google below $100 a share.

Eric Shimp, a trader at Prot�g� Funds LLC, a Boulder, Colo., investment firm, said that to date demand for the issue has been weak. Underwriters have little incentive to push the issue to clients because the fees they stand to generate in the auction are lower than in a typical IPO. In addition, individual investors may not pick up the slack because of the high price of shares and because Google is using a relatively untested auction process.

"They tried to go against the Street on this one � they just went a little too far, and they're going to be punished for it initially," Shimp said.

Morgan Stanley and Credit First Suisse Boston are leading the IPO, which will use WR Hambrecht + Co.'s Internet-based auction system to allocate shares.