Abstract

This is the third of a four-case series. In mid-August 2004, Google has significantly lowered its estimated per-share price range to between $85 and $95, down from the previous range of $108 to $135. Google has also reduced the number of shares to be sold to 19.6 million from 25.7 million following reduced interest from retail and institutional investors and the confusion created by the Dutch auction process. On 19 August 2004, the company makes its long-awaited initial pubic offering (IPO). The stock, which gets listed at $85 a share, closes at $100 by the end of the first trading day. Analysts are divided about the IPO. While Google has clearly got a lower price than what it anticipated, it has introduced a sense of democracy into the IPO process. With the IPO over, media attention is returning to Google's strategy. Google has been developing (or buying) new services such as a web-based e-mail service (Gmail), an on-line photo sharing tool (Picasa), and a tool for creating on-line journals (Blogger)

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Google, Google initial public offering, IPO, Dutch auction, IPO, Securities and Exchange Commission, SEC, Yahoo, Larry Page, Sergey Brin, Market cap, Underwriter, Pricing, Value