Google cuts price ranges of shares for imminent IPO

18 Aug 2004

Google has reduced the price range of its share flotation to between US$85 and US$95 from US$108 and US$135 as it awaits approval from regulators for its IPO tonight.

Google expects to sell 14,142,135 shares of Class A common stock, but selling shareholders are reducing their proposed offering from around 11.6 million shares to just 5.5 million in view of the reviewed price range.

Google and its underwriters have requested that the Securities and Exchange Commission (SEC) will declare its registration statement effective at 9pm Irish time this evening.

The SEC must declare the registration effective before shares can be sold to the public. The SEC failed to give the go-ahead last night as originally anticipated.

The IPO was rocked by revelations that Google’s co-founders laid bare corporate plans in an interview with Playboy magazine, contravening SEC rules on restricting information that may influence trading prior to an IPO.

However, Google denied that the story contravened rules and claimed it actually abided by SEC regulations. While the SEC cannot stop the IPO, it can take action against Google at a later stage.

The imminent US$3.3bn IPO of search engine Google is hotly anticipated as the tech flotation of the year, potentially leading to a revival of favourable sentiment towards technology stocks.

By John Kennedy