Google shares slashed
p2pnet.net News:- Twenty-six billion or 36?
The now famous Dutch auction for a large piece of the Google pie was supposed to have started today but could now happen later in the week. And in the meanwhile, the initial price will now probably be $85 to $95 instead of $108 and $135 per share.
"The new parameters suggest Google is worth around $26 billion overall, not the $36 billion it was originally expected to command," says The Street here, continuing:
"The development … confirms rumors that have been buzzing around Wall Street for days: that demand for the IPO is slack, and that the company’s unconventional Dutch auction distribution system is complicating efforts to sell it."
The Securities and Exchange Commission wants more information on the interview founders Sergey Brin and Larry Page gave Playboy in April, says the report: "The company conceded in a previous filing that the article conceivably could represent a violation of federal ‘quiet period’ rules that govern pre-IPO promotion, although it said at the time – and continues to maintain – that the interview was kosher."
But, says The Street, "Whatever happens, Wednesday’s news will be read as a blow to Page and Brin, whose personal, paper fortunes suffer real-time hits commensurate with the lowered price range. The hang-ups are also fodder for those on Wall Street who believe Google should have gone public through a conventional underwriting, in which demand is calculated and filled by investment bankers, not an auction."
CNN Money says founders Sergey Brin and Larry Page and ceo Eric Schmidt "cut the number of shares they expected to sell by exactly half," and that shares sold by officers and directors of the company as a group will now be 74% less than previously planned.
"But," says CNN, "most of the outside companies that hold stakes in Google, including America Online, its largest outside shareholder, plan to go ahead with their previously planned sale of shares even at the lower price, according to the filing. AOL, like CNN/Money, is a unit of Time Warner Inc."
