Google to go-ahead with float
INTERNET search engine Google is set to push ahead with its troubled flotation tomorrow despite an admission that the US regulator, the Securities and Exchange Commission, is probing the past award of Google stock options to employees.
Google's rocky road to the Nasdaq stock market listing should end with the pricing of the stock this evening and a market debut tomorrow despite the probe.
Most companies usually price their shares within an hour of having their registration statement declared effective by the SEC, which allows them to sell shares to the public. The company had asked for the SEC to give its approval by 4pm in New York - 9pm in London.
Latest indications on the price suggests it could be a disappointment - nearly a dozen investors and analysts who are disclosing their expectations predict that Google's shares will be priced at between $70 and $115 per share.
Google is setting the share price through an unorthodox online Dutch auction, which sees US residents or firms submit bids for the 25.7m shares on offer.
The company hopes the stock will be priced between $108 (£60.27) and $135, although some analystsare concerned that at these prices, the stock represents poor value and this sentiment looks set to push the valuation to the bottom end of expectations. At the mid-price Google would be valued at $32.6bn, easily the biggest Initial Public Offering of the year.
The flotation will make multi-millionaires of founders Sergey Brin, 30 and Larry Page, 31. The only possible derailment to the long-awaited float is the firm's admission that the SEC 'has initiated an informal inquiry' into the company's award of stock options.
It also said that two weeks ago other regulators, including California securities officials, launched an inquiry into the issues.
'If it is determined that we offered securities without properly registering them under federal or state law, or securing an exemption from registration, regulators could impose monetary fines or other sanctions as provided under these laws,' Google said in its latest filing.
The company acknowledges that shares issued and options granted under Google's stock plans exceeded limitations in federal and state securities laws.
As a result, share and option holders may have 'rescission' or buyback rights that could require the company to repurchase shares or options for an aggregate amount of $25.9m (£14.4m).
It is unknown whether the SEC will give the final go-ahead to Google with the issue outstanding, although the company has previously said it would buy back all affected stock.
While the company could easily afford that, it would add to the embarrassment of management blunders that have damaged sentiment to the internet star along the way to the float.
