Googles succeeds in market debut

Shares of the No.1 Web engine Google rose 18 per cent in their stock market debut on Thursday having $1.67 billion IPO within 19.6 million shares sold. The shares closed trade at $100.34, up $15.34 (or 18 percent). The company now is valued at $27.2 billion with founders' stakes at $4.35 billion. Trade varied from $104.06 down to $95.96.

(PRWEB) August 22, 2004 -- During the after-hours after Nasdaq closed shares ended up at $100.02. The shares can also be well supported by missed-the-auction buyers.

Still, Google didnt manage to reach its firstly targeted IPO price. It cut the expected price range on the shares down $85 to $95 on Wednesday from a prior range of $108 to $135. "At $108 to $135 a share, it was too expensive, but now we have a much more comfortable valuation," said Douglas Wright, a portfolio manager for Britannic Asset Management in Edinburgh. Google also slashed the number of shares offered to 19.6 million from 25.7 million. Lower price of the shares can also stimulate investors interest in buying it in the light of initial prices being too optimistic".

Some fund managers even considered the lowing of the price range to be very clever step.

Nonetheless underwriters dont feel like success. 28 of them has got a fee of 2.8 percent on the deal, it is definitely less than half the usual fees for classic IPO. Merrill Lynch & Co. dropped out of the offering in the auction process and drifted fees. Morgan Stanley and Credit Suisse First Boston have been leading in underwriting.

In the light of Thursday events Google received "buy" rating from ThinkEquity with a price target of $120, saying the revised offer range gives the stock the potential upside for investors attraction. Analyst John Tinker marked that the company would benefit from the continued growth of global Internet advertising and broadband deployment while having "mismanaged" IPO and small chance of doubling revenue.