Google’s IPO delayed

  • Associated Press
  • Tuesday, August 17, 2004 9:00pm
  • Business

SAN JOSE, Calif. – Google Inc.’s long-awaited initial stock sale, which appeared imminent Tuesday, has been delayed while the company awaits final approval of its paperwork by the Securities and Exchange Commission.

Regulators made no decision Tuesday as Google had requested, said John Heine, an SEC spokesman. He declined to provide a reason for the delay.

Google did not immediately return a call seeking comment.

The company has updated its regulatory filings several times since first announcing its plans to go public in April, including an update on Monday that stated the SEC was investigating its issue of pre-IPO shares and options without registering them.

Typically, companies work closely with the SEC to ensure all paperwork is in order, making final approval a routine process.

Google had planned to close its share price-setting auction no earlier than an hour after receiving the SEC’s blessings. If that had happened, winning bidders could have been notified and shares could have been traded on the Nasdaq Stock Market as early as Wednesday.

Google anticipates its 25.7 million shares will be priced between $108 and $135 each in what could be a $3 billion initial public offering, which would be a record for an Internet company. If the stock trades at the midpoint of Google’s range, it would have a market capitalization of about $30 billion – lower than Yahoo Inc.’s but above General Motors Corp.

The deal would turn Google’s 30-something co-founders Larry Page and Sergey Brin into billionaires and create a windfall for the search company’s early investors and 2,292 employees who are expected to sell at market prices shares they bought for as little as 30 cents each.

Insiders flooding the market combined with strong demand from outside investors could lead to surprises when the stock finally debuts.

Then again, that’s nothing new for Google.

Since it was founded in 1998 by Stanford University students Page and Brin, it has always been something of an oddball. Its design eschewed flashy ads for a simple, quick-loading layout. Its search algorithm out-powered all rivals. Its name became synonymous with Internet search.

The Mountain View-based company, which makes money by selling unintrusive text advertising, managed to prosper as a private company even while other dot-coms were collapsing. Now, as the technology industry is just recovering, Google stands to prosper even more.

In the second quarter of this year, for instance, Google earned $79.1 million, or 30 cents per share, compared with $32.2 million, or 12 cents per share, in the same period last year. Sales more than doubled, to $700 million in the latest period from $311 million last year.

But its surprising success pales in comparison to the roller coaster ride that’s taken place since Google announced in April that it planned to make its stock available to the public.

The four-month saga that has included Google’s unusual IPO auction to set price based on demand, folksy letters embedded in filings, a Playboy magazine interview of its founders despite a quiet period and the discovery that the company neglected to register millions of shares.

The auction was designed to democratize the IPO process, which is usually limited to investors connected to investment banks. Still, many analysts questioned whether Google’s projected price was affordable to average investors.

Google’s prospectus not only included the usual bureaucratic language and charts, but also a folksy letter from its founders. The document contained more than 20 pages of warnings, ranging from competition and potential technical problems to gaffes like the Page and Brin interview that appeared in Playboy magazine during the company’s so-called quiet period.

One of the more serious disclosures was the fact that Google neglected to register 23 million shares and 5.6 million options. They were issued from September 2001 through July 2004, primarily to employees and consultants.

Associated Press

Google co-founders Larry Page (left) and Sergey Brin are waiting for final approval for its highly anticipated initial public offering from Securities and Exchange Commission regulators. Google’s 25.7 million shares will be priced up to $135 each.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Image from Erickson Furniture website
From couch to coffee table — Local favorites await

Style your space with the county’s top picks for furniture and flair.

Nichole Webber: Drawing up plays for athletes and politics

The communications director for the city of Everett believes leadership is rooted in honesty, integrity and selfless commitment to others.

2025 Emerging Leader DeLon Lewis (Olivia Vanni / The Herald)
DeLon Lewis: Helping students succeed

Program specialist for Everett Community College believes leadership is about building bridges.

2025 Emerging Leader Natalie Given (Olivia Vanni / The Herald)
Natalie Given: Building trust and communicating concerns

Everett Police Department’s Public Information Officer builds relationship and better communication.

2025 Emerging Leader Scott Hulme (Olivia Vanni / The Herald)
Scott Hulme: Standing up for downtown

Business development manager for the Downtown Everett Association brings property owners, tenants and city leaders together.

2025 Emerging Leader Anthony Hawley (Olivia Vanni / The Herald)
Anthony Hawley: Creating friendships and filling pantries

Since 2021, Hawley has increased donations to Lake Stevens Community Food Bank through fundraising and building donor relationships.

2025 Emerging Leader Rick Flores (Olivia Vanni / The Herald)
Rick Flores: Learning lessons from marching band

Directs the Mathematics, Engineering, Science Achievement program at WSU Everett helps underrepresented students with tutoring, specialized courses, mentorship and support networks.

2025 Emerging Leader Melinda Cervantes (Olivia Vanni / The Herald)
Melinda Cervantes: Making sure every voice is heard

Prolific volunteer facilitates connections between Spanish-speaking public representatives and community members.

2025 Emerging Leader Megan Kemmett (Olivia Vanni / The Herald)
Megan Kemmett: Seeking solutions to any problem or obstacle

Executive director of Snohomish Community Food Bank overcomes obstacles to keep people fed.

2025 Emerging Leader Kellie Lewis (Olivia Vanni / The Herald)
Kellie Lewis: Bringing community helpers together

Edmonds Food Bank’s marketing and communications director fosters connections to help others.

2025 Emerging Leader Christina Strand (Olivia Vanni / The Herald)
Christina Strand: Helping people on the move

Community engagement specialist believes biking, walking and public transit can have a positive impact.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.