Google Inc, the world's most-used Internet search engine, cut the price range on its initial public offering by about a quarter, valuing the company at as much as US$25.8 billion.
Google reduced the price to between US$85 and US$95 a share from the previous range of between US$108 and US$135 a share, the company said in a statement on its Web site. Shareholders lowered the number of shares they are selling by 6.1 million to 5.5 million because of the lower price range, Google said. The company still plans to sell about 14.1 million shares.
"The new range is a clear reflection of the recent news flow and a big improvement over the previous range, which in my opinion valued Google way too high," said Jan van der Hout, who is part of a team at Van Lanschot Asset Management in the Netherlands, that oversees the equivalent of about US$2.5 billion.
"I will definitely take a look at the shares once they start trading, but there's no rush," he said.
The sale will make billionaires out of Larry Page, 31, and Sergey Brin, 30, who founded the Mountain View, California-based company in 1998 after meeting as graduate students at Stanford University.
The company's market value at the top of the new range would value Google at about the same as Ford Motor Co.
Google is cutting the price range for its stock in the face of a slumping market for IPOs, a drop in technology shares and missteps that included a failure to register some shares. The decision to use an auction was the biggest test of a system that challenges how securities firms handle stock offerings and may threaten bankers' fees.
Cindy McCaffrey, a Google spokeswoman declined to comment on the new price range when contacted by phone.
Google said in the statement that it asked the US Securities and Exchange Commission (SEC) to declare its registration effective at 4pm yesterday in Washington. Bid-ders for shares of Google were left waiting after the commission didn't act on the company's application to complete its initial public offering.
The price range is 26 percent lower than the previous range, based on the difference between the middle of the ranges. The earlier range valued Google at as much as US$36.6 billion.
Underwriters will have the option to buy an additional 2.9 million shares from shareholders, the company said in yesterday's statement.
The delay may prompt potential Google bidders to think a SEC inquiry into shares the company failed to register is holding up the sale, attorneys and analysts including Martin Pyykkonen of Janco Partners Inc said. Some buyers may withdraw bids they've placed in Google's IPO, which is the largest ever to be distributed through an Internet-based auction.
"If someone gets the jitters because the SEC is going to take more time, they're going to be more wary than they were 24 hours ago," said Pyykkonen, an analyst with Janco Partners in Greenwood Village, Colorado.
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