Google ups its imminent IPO value by US$1.1bn

26 Jul 2004

The world’s premier search engine Google has increased its valuation for its imminent IPO by US$1.1bn, bringing it up to US$3.3bn, which means the company could have a potential initial market capitalisation as high as US$36.25bn.

About 24.6 million shares are to be sold in the IPO for between US$108 and US$135 a share, an amended prospectus filed with the Securities and Exchange Commission. Google plans to sell 14.1 million shares while another 10.5 million shares will be sold by the company’s existing stockholders under the symbol “GOOG.”

The company is understood to be planning to use the net proceeds – in the region of US$1.66bn – for general corporate purposes. It will not receive any proceeds from shares sold by stockholders.

Some 28 copywriters led by Morgan Stanley and Credit Suisse First Boston will have the option to buy an additional 3.7m Class A shares in the IPO. Stockholders like AOL Time Warner and Yahoo plan to sell 10pc of their respective stakes in the IPO.

The news coincided with Google’s second quarter results, with the company reporting a 24pc increase in profits from US$64m to US$79.1m. Revenue jumped 7.5pc to US$700.2m, from US$651m in the first quarter. Operating income at Google increased to US$171m from US$155.3m in the previous quarter.

By John Kennedy