USA: UNCERTAINITY AS COMPUTER WEBSITE SEARCH COMPANY GOOGLE PREPARES TO OPEN AUCTION FOR BIDDERS TO INVEST IN COMPANY

Record ID: 1664814

  • Title: USA: UNCERTAINITY AS COMPUTER WEBSITE SEARCH COMPANY GOOGLE PREPARES TO OPEN AUCTION FOR BIDDERS TO INVEST IN COMPANY
  • Date: 10th August 2004
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  • Location: MOUNTAIN VIEW, CALIFORNIA
  • City: Mountain View California
  • Country: USA
  • Reuters ID: LVA1HBWTICEUD6H0PVUWTAXIHZWC
  • Aspect Ratio: 4:3
  • Story Text:Google's $3.3 billion (USD) dutch auction IPO is set for 1300 GMT on Friday.
    The waiting is almost over. Google says it has closed bidder registration in its $3.3 billion dollar dutch auction IPO, and bidding is scheduled to commence Friday (August 13) at 1300 GMT.
    Details surrounding the bidding process came out with fairly little notice. Google's vague communication style is typical for the silicon valley company and its not necessarily going over well on Wall Street: Alain Sherter, Assistant Managing Editor with The Deal said "There is a lot of uncertainty in the institutional investment community about the company in part because Google has kept this arms length relationship with the underwriters. So institutional investors have questions about the auction process and they also have questions as to whether Go ogle can sustain this extremely high price to earnings ratio that they have outlined."
    At $135 dollars, the high end of the estimated pricing range, Google's price to earnings ratio would be a sky high 329, based on 2003 earnings. That's more than twice its competitor Yahoo!.
    IPO watchers point to a number of challenges for the offering. Recent demand for IPO's in general has been weak.
    Google also faces competition from established companies like Yahoo and MSN, as well as startups, similarly to the situation just a few years ago.
    The company recently had to increase the number of shares being offered to settle a lawsuit with Yahoo! over technology used to display advertisements.
    Google has also admitted it may have broken security laws by not properly disclosing shares issued to insiders.
    Investors are also confused about the mechanics of the Dutch Auction process, which experts say has been a turn off for individual investors.
    For example, many of the underwriters have set up rules that are contradictory to those dictated by Google.
    The company's 'take it or leave it' attitude does not always go over well.
    "Its not good as far as Wall Street is concerned. It may be good as a marketing ploy and it may bring some individual average investors to the company who are seduced with the company's brashness. Over the long term, Sergei Brin, Larry Page, and Eric Schmidt are going to have to negotiate a more productive and shall we same tactical relationship with big investors," Sherter told Reuters.
    Investors wanting more details on the IPO can get information from a website the company has set up for the offering at www.ipo.google.com.
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    Date: 11/08/2004 08:00
    Original Date: AUGUST 11,2004 AND RECENT
    Total number of clips: 8
    Story Copyright: Thomson Reuters
    Story Restrictions: Information for Reuters subscribers only: NONE
    Audio: NATURAL WITH ENGLISH SPEECH/PART MUTE
    Locations: INTERNET/ MOUNTAIN VIEW, CALIFORNIA; NEW YORK CITY, NEW YORK, UNITED STATES
    Country: Usa
    Color B/W: colour
    Original Source: REUTERS / GOOGLE VNR - edit 506 WORLD 2, AUGUST 13,2004 (REUTTV)
    Original Aspect Ratio: 4:3
    Topics: Business, Communications, Economy, Technology
    Source News Feeds: RVA for Partners Only NO BBC
    USN: VA3HSIIIRQ9EPP9Y9GA91DW215E
    ID: tag:reuters.com,2004:newsml_VA3HSIIIRQ9EPP9Y9GA91DW215E:6
    Legacy ITN Ref: 408110031
    Legacy Reuters Ref: 11886/04
    Legacy Tape: 9980
    Legacy Tape T/C: 14:53:23 - 14:56:00
    Legacy Film/Tape Length: 2.32
  • Copyright Holder: GOOGLE VNR
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