Shares of Google Inc. made their long-awaited stock market debut on Thursday, rising more than 20 percent to over $100 after an initial public offering marked by missteps and lackluster market conditions.
Google co-founder Larry Page and Chief Executive Eric Schmidt, guarded tightly by security, were at the Nasdaq stock market's broadcasting facility in Manhattan as the Web's most popular search engine began trading as a public company.
After ending its unconventional auction to price and sell the shares on Wednesday, Google sold 19.6 million shares at $85 each, raising $1.67 billion, the biggest IPO thus far by an Internet company, informs Reuters.
According to Bloomberg, Brin and Page, who started the company as Stanford University doctoral candidates in 1998, tried to challenge Wall Street's traditional method of managing IPOs. They departed from the practice in which securities firms assess demand and award shares, often to favored clients who can reap the benefits of price increases in the first days of trading.
Google's so-called Dutch auction let investors submit bids over the Internet, fax and telephone, a method it said would let small investors get more shares and set a stable price.
Google "made the offering so complicated that a lot of people who were interested in the company, weren't interested in buying the stock in the IPO," said Don Jesberg, who helps manage $220 million at Reynolds Funds in Larkspur, California. He said he's considering buying shares.
Eric Schmidt, Google's CEO, sold 369,000, banking $31.4 million. He still holds a stake worth about $1.2 billion. And, according to the Associated Press, a few other big winners include Andy Bechtolsheim and David Cheriton, who each invested $200,000 in Google early on.
Bechtolsheim, who co-founded of Sun Microsystems, made $30.7 million in the IPO and Cheriton earned $28.9 million, the AP said. Bechtolsheim's still owns shares worth about $276 million, and Cheriton's were worth more than $260 million.
Moreover, Omid Kordestani, a senior vice president, took home $20.4 million when he sold shares into the initial public offering, according to the report. He still owns a stake worth $388.5 million. Google's IPO will likely also give birth to a new generation of millionaires.
Joe Rich, executive vice president of Clark Consulting, said Google employees will own about $5 billion in stock, or an average of $2.2 million each, excluding the big share held by the company's top five executives.
Google has granted a total of 20.7 million in stock options to virtually all of its 2,292 employees. In some cases, the options were priced lower than 49 cents a share. A majority, 17.8 million shares, were not vested as of June 30, according to a regulatory filing made in late July, reports CBS News.
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