Google drops target price, extends auction to Wednesday
Google Inc. lowered the target price per share for its initial public offering (IPO) on Wednesday, and asked the U.S. Securities and Exchange Commission (SEC) to give buyers additional time to reconsider their bids, according to a notice on the company's IPO Web site.
The company now expects the offering price for the shares to be in the range US$85 to $95, down from the $108 to $135 originally cited in its IPO prospectus, it said Wednesday. Along with its underwriters, Google has asked the SEC to declare its registration statement effective at 4 p.m. Eastern Time on Aug. 18, a day later than it previously announced.
Once the registration statement is declared effective, the auction can end and public trading of the shares can begin.
Google, in Mountain View, California, said it will amend the online version of the prospectus this morning to indicate the new price range, and urged registered bidders to read it and reconsider their bids before the end of the auction.
The company said it still plans to sell 14,142,135 shares of Class A common stock in the auction, but in view of the lower expected offering price, the selling shareholders now expect to sell around 5.5 million shares. That brings the total number of shares on sale down to around 19.6 million; previously, the company had expected 25.7 million shares would be sold. The selling shareholders have also allowed the IPO's underwriters to buy around 2.9 million additional shares to cover over-allotments, should they sell more shares than are currently available.
The IPO was originally expected to bring in as much as $3.5 billion, but with the new target price range and smaller number of shares the IPO would bring in $1.9 billion at the high end.
The IPO is still the subject of an informal inquiry by the SEC and Californian authorities, which are concerned about irregularities in stock options and shares Google has issued since 1998.