Google IPO Being Delayed
According to sources at the Wall Street Journal and CNBC, Google will be delaying their IPO for one week due to problems with the auction set up and the fact that Google did not register over 28 million shares issued to past and present employees over the last four years, putting the IPO at risk.
CNBC reports that “Google had never set a date for the deal, though people familiar with the matter had pegged the date for next week. What’s more, Google had said it would be about a week from the time it activated the Web site on which investors can register until they priced. That site was activated last Friday.”
Google’s error in filing the additional 28 million IPO’s was reported in a Securities and Exchange Commission filing, and relates to over 23.2 million shares of common stock and 5.6 million outstanding stock options that the company has issued to employees and consultants. Google did not register those stocks with securities regulators, which can violate federal securities laws.
CNBC adds “Part of the problem, the person said, was that Google’s IPO, which is being led by Morgan Stanley and Credit Suisse Group’s Credit Suisse First Boston, is being run through an auction format that had never been tried before. “It’s all new,” the person said. “We just hit a speedbump.”
Google’s planned mid-August IPO, which is being conducted through an auction process, might raise as much as $3.3 billion. Although according to the WSJ, Google’s unorthodox IPO bidding may be scaring some investors away; “Some institutional investors, including mutual funds and hedge funds, are reluctant to bid a high price for the IPO, which may be starting between $108 and $135.”