Google has floated at a US$85 (€68.7) share price, considerably less than the original valuation of US$108 to US$135 (€88 to €110). The company also issued less shares – only 19.6 million, where 25.7 million had been planned initially. It is thought that executives held on to parts of their stakes because of weak demand. Only 5.5 million shares were issued to private investors, less than half the number first bandied about. The shares were issued in a Dutch auction – bids are ranked from highest price down and shares are allocated. Pundits feel that by releasing less shares, the stocks did not have to be sold to the lower bids – sneaky.
The IPO will raise US$1.67 billion (€1.35 billion) for Google, making it the fourth largest this year. Though, since many IPOs have been cancelled in the last few months, that isn’t saying much.
The float values Google at US$23 billion (€18.6 billion), down from the US$36 billion (€29.1 billion) suggested when optimism for the share sell off was at its highest. To give some perspective, Amazon is valued at US$16 billion (€13 billion).