Google To End IPO Registration
Google Inc. will close the registration process for its IPO auction Thursday, setting the stage for the online search engine leader's hotly anticipated stock market debut.
The Mountain View-based company posted an online notice Tuesday announcing plans to end the registration process at 5 p.m. EDT Thursday. After closing the registration period, Google plans to launch an unusual auction to sell 25.7 million of Google's shares "soon thereafter," the company said. No further details were provided.
Most market observers expect the auction for the initial public offering to be completed next week, clearing the way for Google's shares to begin trading on the Nasdaq Stock Market under the ticker symbol "GOOG."
But Google hasn't spelled out a precise timetable for the auction. In its IPO prospectus, the company stresses it can close the auction "at any time." The prospectus also raises the possibility that the auction could be a lengthy process, noting that bidders will be asked to reconfirm their bids if the process lasts for more than 15 business days.
Once Google is prepared to close the auction, the company must ask the Securities and Exchange Commission to give its final approval of the IPO prospectus. After the SEC signs off on the deal, bidders will have a final opportunity to withdraw their bids. The winning bidders in the auction will be notified by e-mail within 24 hours of SEC approval.
To participate in the auction, bidders need a 16-digit registration number to present to one of the 28 brokerages handling Google's $3.1 billion IPO. The company has been distributing the identification numbers since July 30 when it opened a special site, www.ipo.google.com.
Google has valued its IPO at between $108 and $135 per share, but the company's so-called Dutch auction is supposed to determine the final price. Bidders can submit offers below, above or within Google's price range. Google will analyze the range of auction bids to set the final, or "clearing," price for its IPO.
Some analysts have endorsed Google's self-appraisal, which values the 6-year-old company at $29 billion to $37 billion, based on the 271.2 million shares that will be outstanding after the IPO. The market valuation would make Google worth as much as long-established brands such as Sony and McDonald's.
The lofty IPO price target reflects Google's tremendous growth since former computer graduate students Larry Page and Sergey Brin started developing the company's vaunted search technology in a Stanford University dorm room. Page and Brin each hope to pocket more than $100 million by selling some of their Google shares in the IPO and retain stakes that will make both men worth billions on paper.
Not everyone agrees with Google's self-assessment. The skeptics who believe Google isn't worth buying at above $100 per share cite the tougher competition the company faces from imposing rivals such as Yahoo Inc. and Microsoft Corp. To make matters worse, investors have been dumping Internet stocks in recent months. The Dow Jones Internet Index has declined by 20 percent since Google filed its IPO plans in late April.
Most brokerages involved in Google's IPO are allowing bidders to submit an unlimited number of offers per account. But others are setting limitations, which are outlined in the prospectus available on Google's IPO site.
All the participating brokerages except HarrisDirect are allowing bidders to buy as few as five Google shares. HarrisDirect is requiring its customers to buy at least 100 shares in the auction.
Google has warned bidders making multiple offers to avoid a situation where they might wind up spending more money than they intended. This could happen if a bidder makes multiple offers and all are accepted. For instance, a bidder intending to spend less than $1,000 on Google shares could offer to buy 7 shares at $125 and 7 shares at $130 and end up getting 14 shares for $1,743 if the auction sets the final price at $124.50 per share.
By Michael Liedtke