Google may have chose a bad time for its IPO – the market for technology stocks is slowing and companies like Nanosys are cancelling their own offerings.
Analysts believe that members of the public will invest in Google because of the brand, and the Dutch auction scheme has a populist appeal. Indeed, the New York Times has even reported that Jerry Kaplan, has warned his mother not to buy Google stock. Many institutions are taking the tried and trusted “wait and see” approach.
With MSN breathing down Google’s neck with new features and Windows integration, they have tough times ahead.
Google’s 24.6 million shares are expected to raise US$3 billion (€2.5 billion) for the company, and documents filed with the Securities and Exchange Commission reveal that Google executives believe that the company will be worth up to US$36 billion (€29.8 billion) on the day of the IPO.
It also transpired this week that Google has issued 30 million shares to staff, but failed to register them. This may be a serious breach of stock market regulations, and the company is now planning to buy the shares back – though at prices much lower than the US$108 to US$135 (€90 to €112) estimates for IPO stock. A rescission of the unregistered stock would only cost Google about US$26 million (€21.5 million) out of their US$0.5 billion (€0.4 billion) cash reserves.