Internet search leader Google Inc detailed its highly anticipated public stock offering (IPO) with an estimate that its market value will be as high as US$36 billion, which would rival corporate stalwarts such as McDonald's Corp and Sony Corp.
Google said 24.6 million shares will be sold for US$108 to US$135 each, depending on the unusual auction Google plans to employ as early as next month, according to a regulatory filing.
That would mean that between US$2.66 billion and US$3.32 billion in stock would be sold in the IPO. However, the amount the company itself expects to raise is around US$1.66 billion, because 10.5 million of the shares being offered are being sold by existing stockholders.
It would be the eighth-largest IPO in history, bigger than most that took place during the 1990s dot-com boom. Unlike those companies, however, Google has consistently been profitable and has posted steep revenue increases.
But while this IPO will be big, it's not expected to generate the kind of hysteria that surrounded tech offerings in the 1990s, when companies like Netscape Communications, Pets.com and Webvan.com saw their stock soar despite a lack of profits and, in many cases, questionable business models.
"There are no virgins anymore when it comes to Internet investing. People have seen the upside as well as the down," said Barry Randall, a manager at US Bancorp Asset Management in Minneapolis.
"All investors -- whether institutional or individuals -- are far more savvy about what's possible as an Internet company," he said.
Google, which is offering just 9 percent of its stock, would have a market capitalization -- a company's total value -- between US$29 billion and US$36 billion. The average in the S&P 500 is US$21.25 billion. Rival Yahoo Inc. has a market cap of nearly US$38 billion.
Once shares begin trading on the NASDAQ, Google expects to have the ticker symbol "GOOG."
Google shares will be distributed in an auction designed to give the public a better chance to buy stock before shares begin trading. In the past, companies' IPO shares have been restricted to an elite group picked by bankers handling the deal.
Analysts expressed some surprise that the search behemoth -- given its "Do No Evil" mantra and its desire to democratize the IPO process -- is not going to split its stock to bring the price range down to levels more appealing to average investors.
Once issued, Google stock could be volatile, though analysts are debating whether the high initial price or the auction format might result in swings in either direction after public trading has begun.
Because the auction is set up to determine the price most people are willing to pay for the stock, theoretically few people would want to buy shares at a higher price in the first few days or weeks after they begin trading.
The scenario could cause IPO bidders to worry they overpaid for Google's stock and prompt a wave of selling that drives down the price, a phenomenon known as the "winner's curse."
Google founders Larry Page and Sergey Brin, who developed the search engine and formed the company in 1998, stand to profit handsomely, along with Google's stockholding employees and venture capital investors.
Google's filing with the Securities and Exchange Commission gave an updated picture on the company's booming growth, fueled almost entirely by advertising linked to online searches.
In the second quarter, Google earned US$79.1 million, or US$0.30 per share, compared with US$32.2 million, or US$0.12 per share, in the same period last year. Sales more than doubled, to US$700 million in the latest period from US$311 million last year.
In the first six months of this year, the company earned US$143 million, US$0.54 per share, on revenue of US$1.35 billion. In the comparable period last year, the company's profit was US$58.0 million, US$0.23 per share, on revenue of US$560 million.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source