After a series of missteps, Google finally pulled off its much-hyped initial public offering Thursday. The good news about this unusual IPO, which sought to deprive Wall Street banks of full control over the sale, is that it made it easier for individual investors to buy the stock. Of course, that may also be the bad news. At its closing price of just above $100, Google is valued at a bubbly $27 billion.
The co-founders of the Google search engine, Sergey Brin and Larry Page, got very rich, and deservedly so. This Internet icon that raised $1.67 billion Thursday by selling only a small percentage of its shares didn't even exist six years ago. Now its very name is part of the information age lexicon, as people talk about "googling" someone, wrote International Herald Tribune.
Google gave the public a chance to buy shares directly, on an equal footing with banks and big traders. The response from the financial establishment was understandably sour. The result was that, during Google's so-called `'quiet period" preceding the IPO, the information vacuum was filled by the establishment, which gravely identified the company's "missteps" and "blunders."
This actually worked to everyone's benefit. On Thursday Google closed at $100 a share, a nearly 20 percent jump from its $85 IPO. The auction worked as a pricing mechanism precisely because the valuable expertise of the investment banks and institutions was naturally folded into the bidding process, lowering the cheekily high price Google was initially seeking and leaving sentimental investors for once with the chance to sell brand new shares side-by-side with the big players when the opening bell rang, reported The Boston Globe.
Investors continued to pour into Google's stock Friday, driving up the price of the Internet search company's shares 8 percent the day after its Wall Street trading debut.
Google stock closed at $108.31 a share on the Nasdaq, up from $100.34 Thursday. Since Google become a public company -- after distributing shares Wednesday in an unconventional auction restricted to U.S. investors -- its stock has gained more than 27 percent.
``A number of people sat out the auction, either because they had to because they were international, or because they didn't want to get into the whole auction process,'' said Scott Kessler, Internet analyst for Standard and Poor's. ``They are getting involved now.''
Bloomberg News reported Friday that Google's IPO underwriters were able to sell an extra 2.94 million shares that had been made available for the auction in case demand was high enough.
The sale means the IPO actually raised about $1.9 billion, not $1.67 billion as previously reported. However, because the extra shares belonged to Google investors such as AOL and Yahoo, those companies will get the sales proceeds, not Google, told Mercury News.