Google has revealed that it is to close bidder registration for its auction-style initial public offering (IPO) tomorrow (12 August), with the auction of the 25.7 million shares of Class A common stock taking place soon after the close of registration.
In order to bid for the Class A common stock, investors must have a bidder ID to participate in the IPO. According to Google’s IPO website – www.ipo.google.com – in order to achieve a bidder ID you must be a “US person”, which either means you are a US citizen or belong to a company that has a base in the US.
Google yesterday boosted the number of shares it plans to sell in the IPO to 25.7 million shares, saying it will issue 2.7 million shares to Yahoo! in order to settle a patent lawsuit over Google’s keyword advertising system which violates patents owned by Yahoo! subsidiary Overture Services, which is in the process of creating 250 jobs in Dublin. Google itself is also in the process of establishing a European headquarters in Dublin.
Google expects its shares to be worth US$108 to US$135 each. After the flotation of Salesforce.com earlier this summer, the flotation of Google is one of the most eagerly awaited IPOs of the year, which tech investors believe will help revive sentiment in favour of tech stocks.
However, the road to the flotation has been a rocky one. The imminent IPO has already drawn fire from the Securities and Exchange Commission over claims that Google illegally issued shares to existing and former employees.
The company also faced a battle convincing fund managers to join the bidding battle for what has been termed a “Dutch auction” for Google’s shares. The auction-style bidding process has also drawn criticism from financial journalists and seasoned investors alike.
Interestingly, the term “dutch auction” is an abridged version of “Dutch tulip auction”, referring to the hyped bidding battle for overvalued tulips in the 17th century; a metaphor often attached to the overvaluation of dot.com stocks in 1999 and 2000.
By John Kennedy