August 16, 2004

If all goes according to plans, Google is to be ready to start trading on Wednesday.

Google said in a statement on its IPO Web site Monday that it asked the Securities and Exchange Commission to declare the company's registration settlement effective Tuesday afternoon.

Such a move would pave the way for the company to set a price that evening.

Google added that it will begin accepting bids as soon as one hour after the SEC declares the offering to be effective.

If so, the company, seeking to raise $3.3 billion through its IPO, could make its debut on the Nasdaq market Wednesday morning.

But Tom Taulli, founder of CurrentOfferings.com, an IPO research site, said that Google will not necessarily begin trading that soon. He said that once the SEC declares the offering effective, that simply means that Google is legally allowed to start selling shares.

However, Taulli added that Google might want to take advantage of the fact that tech stocks have enjoyed two consecutive days of gains after what has been a brutal summer. The Nasdaq surged nearly 1.5 percent Monday.

"They probably want to sell into strength. If there's enough demand to get it done, they'll want to get it done as fast as possible," Taulli said.

Google's IPO has been one of the most widely anticipated in years. But there have been several stumbling blocks since the company filed to go public in April. (Click on the timeline to the right for more).

In addition, the Dutch auction process used to determine the offering price has led to much confusion. Potential investors had to register on a Web site for a 20-digit bidder ID, for example.

And even though the Dutch auction enabled more small investors to get in on the deal than with many of the hot IPOs of the late 1990s, Google set a preliminary price of $108 to $135 for its stock in July, a level which many analysts and money managers called sky-high for the average investor.

For one, it valued Google at a premium to top competitor Yahoo! by some measures. Plus, only a handful of stocks, let alone IPOs, trade above $100, a level that often leads companies to do stock splits.

And if all that wasn't enough, Google's debut comes when tech stocks, and Internet stocks in particular, have been hit by a huge sell-off during the past month and a half.

Market observers said it's difficult to say just yet, without knowing what the final price for Google will be, whether or not the stock will have a favorable debut.

But David Menlow, president of research firm IPOfinancial.com, said that he would be surprised if Google priced the deal below $100 a share, even though he felt that price would be too high to lure the types of small investors that Google had hoped to attract through the auction process.

"The IPO offering price could be the high price for the year. I don't know who's going to be there supporting it if it's over $100," said Menlow.

Source: CNN FN.com

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