The Google Ipo

The Google IPO

Pre-IPO

Initiated from their dorm rooms at Stanford University while they were the Doctoral students major in computer science, Larry Page and Sergey Brin founded Google in 1998 with the $1,000,000 funded by the angel investors. In fiscal 2003, Google has generated $961.9 million in revenue and posted $105.6 million in net profit. Head-on competing with another search giant Yahoo.com, with 60 million internet users, Google has become one of the most powerful search engines in the world.

In October 2003, Microsoft was seeking possible partnership or merger with Google. The deal fell through. To make sure they have the absolute voting power and ownership, Larry Page and Sergey Brin announced to raise capital of exactly USD $2,718,281,828 ( a product of “e” and $1 billion, where “e” is the base of the natural logarithm) through the Dutch auction with Initial Public Offering.

Process of IPO

Google filed an S-1 form with the Securities and Exchange Commission for the IPO on April 29, 2004. The detailed documents showed that Google has been profitable since 2001 and with its solid performance in 2003.

Google founders knew very well that the demand of Google’s share would be extremely high. Therefore, in a letter as a part of the filing to the Commission, Brin and Page determined to use Dutch auction to find its ultimate price. Just as the company is supported by the millions of internet users around the world, they believe that Google IPO would not only strengthen the market share of Google, but also provide small investors a ground breaking opportunity to cash in their long anticipated and deserved reward.

On April 30, 2004, Google named Morgan Stanley and Credit Suisse First Boston to be the lead underwriters.

On the debut day, Google raised 1.67 billion selling 19.6 million of shares. The stock traded between $95 and $104.06. Google was daring yet cautious with each move. Its opening price was $85, which was below its expected trading price so that it could build up a base to climb. While Wall Street kept Google under its scrutiny for