In a filing with the US Securities and Exchange Commission (SEC), search-engine giant Google said this week that it expects the company's shares to sell for up to $135 when Google issues its initial public offering (IPO) next month. Such a figure would set Google's worth at as much as $36 billion. If Google can obtain such a high share price, the company's value will equal or surpass that of established economic giants such as McDonalds and Sony.
Google will institute an unusual Dutch auction when the company goes public. Google underwriters will compile a list of bids from would-be investors, rank the bids by price, and calculate the highest possible price at which to sell the company's 24.6 million shares. Investors will then be allowed to buy shares at the calculated price, even if their original bids exceeded it. When the IPO is issued, each of Google's two founders will immediately receive more than $100 million, and each of the company's principle investors will receive more than $250 million.
Ironically, on the day of Google's SEC filing, a new version of the MyDoom computer virus kept the company's Web site offline for millions of users for several hours, highlighting the fragile nature of a purely Internet-based business. But malware is the least of Google's problems. The company's laid-back demeanor is starting to wear thin on investors, who were unimpressed with the presentations that the Google cofounders made during a recent road show. Investors who spoke to "The Wall Street Journal" this week said that they'd be unwilling to bid high prices for the Google stock unless the company is more forthcoming about its plans. Other investors are unhappy about the Dutch auction format.