Google Files to Sell 14.2M Extra Shares

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Source Title:
Google to Sell 14.2 Million Shares
Story Text:

Google has filed to sell a further 14.2M shares which will in effect raise a whopping $4Bn for "general corporate use".

Google Inc. said Thursday it has filed with the Securities and Exchange Commission for a proposed public offering of 14.2 million class A common shares.

Google shares, which have tripled since going public one year ago, closed Wednesday at $285.10 on the Nasdaq Stock Market, giving the offering an estimated value of $4 billion at that share price.

They are already profitable. What do they need $4 billion for?

Comments

Understanding stock splits

Have a look at this article which explains why comapnies try to get the price per share down by offering more shares

Quote:
Say you had a $100 bill and someone offered you two $50 bills for it. Would you take the offer? This might sound like a pointless question, but the action of a stock split puts you in a similar position. In this article we will explore what a stock split is, why it's done and what it means to the investor.

not a stock split

Google has always stated that they wanted a high share price, which helps to grant the perception that the company is exceptionally successful. As far as I know they are not doing a stock split...they are issuing a larger float.

Nevertheless

the effect will be the same - to lower the stock price of existing stock

And FWIW, make what you will from this!

Quote:
The company, however, said it has no current agreements or commitments to any material acquisitions. Pending such uses, Google plans to invest the proceeds in highly liquid, investment-grade securities, according to the SEC document.

Why would it lower the

Why would it lower the current price?

I assume they will be selling the stock at the current market price. The market capitalization will increase by 4 billion $ and the share price will not change because the extra shares in issue will be worth 4 billion $.

It's more likely they know the stock is topping out and they want to get cash for the shares while they can at the silly price. It will shield them later when Google's stock comes back down to reality. To be honest if they were really greedy they should float 5 times as much and raise 20 billion and lock in the value of the company to at least 20 billion for the bad times. If all the high techs had done that in 2000 they would still be here.

A class shares!

From NYT I never realised it, but...

Quote:
Google has two classes of shares, A and B. Mr. Brin, Mr. Page and Google's chief executive, Eric Schmidt, own most of the class B shares, which have 10 votes to the single vote of each class A share.

Could be something to do with why they don't give a monkeys for analysts!

yes, but those shares will

yes, but those shares will never get sold :)

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