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intelliot
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 Posted: Fri Aug 13, 2004 2:48 pm Post subject: Google to Take Bids for IPO Shares Beginning Tomorrow |
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| Quote: | Aug. 12 (Bloomberg) -- Google Inc., the world's most-used search engine, will begin taking bids in its auction-style initial share sale tomorrow, moving founders Sergey Brin and Larry Page closer to a test of whether investors will pay the $108 to $135 per share the company is seeking.
Individuals and institutions who registered by 5 p.m. New York time will be able to bid for Google stock, Mountain View, California-based Google said on its Web site. The price of shares in the IPO will be announced the week of Aug. 16, Google said.
Google's IPO may not raise as much as the $3.47 billion that the company has projected, analysts including Scott Kessler at Standard & Poor's said. Investors including Thomas Wyman at Husic Capital Management said they don't plan to submit bids because they're concerned about Google's slowing sales growth and competition from Yahoo! Inc. and Microsoft Corp.
``There's no question that there are a lot of risks related to this offering,'' Kessler said this morning. He recommends that investors bid $110 for Google shares.
Wyman, who helps manage about $500 million at Husic Capital Management, said his firm wouldn't buy shares in the IPO.
Investors will bid for Google stock, the company will close bidding and then set the price for its IPO in consultation with lead managers Morgan Stanley and Credit Suisse First Boston. Google has said in filings with the Securities and Exchange Commission the auction system is intended to limit share-price volatility other companies have experienced in their IPOs.
`Every Last Penny'
``Google is trying to get every last penny from investors,'' Rick Jandrain, manager of the $2.5 billion One Group Mid Cap Growth Fund in Columbus, Ohio, said before Google's announcement. `They're setting themselves up not to have a successful launch. I think a lot of people are on the sidelines.''
One Group hasn't registered to buy shares in the Google IPO, Jandrian said.
The stock may fall after the IPO because of the ``winner's curse,'' common to auction-style IPOs, Google said in filings. That's where investors believe there is little demand for stock above the clearing price and refuse to bid higher.
Google is selling into a declining market for Internet stocks. Web shares have fallen through July and August as Yahoo! Inc., Amazon.com Inc. and IAC/InterActiveCorp. reported second- quarter sales that were lower than analysts estimated. EBay Inc. projected revenue for all of 2004 that was less than analysts expected.
Google Revenue
Google's second-quarter revenue rose 7.5 percent from the first quarter, slowing from its previous pace of 27.2 percent, the company stated in filings. That was partly because of ``seasonality'' as the growth of Internet traffic slows during the summer months, Google said.
The company generates 98 percent of its revenue by selling text advertisements that appear next to search results and other online content. The ads appear on Google's own sites as well as those of companies it's formed partnerships with, including Time Warner Inc.'s America Online.
Google said it expects its sales growth to slow and profit margins to decline in the future, partly because of competition.
Yahoo, the second most-used Web site for searching the Internet, introduced new searching technology in February. The Sunnyvale, California-based company had previously offered Google's technology through a partnership between the companies.
``I don't want to knock Google because Google is doing extremely well in search,'' James Friedland, an analyst with SG Cowen Securities Corp. in San Francisco said yesterday. ``Yahoo has gotten much, much better. As far as I'm concerned, it's equal to Google's.''
Microsoft, the world's largest software-maker, has said its also developing a search engine. |
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