Google IPO Sparks Excitement among Investors, Wall Streeters
First Google became a verb: Have you goggled today? Now it has become the most anticipated initial public offering in years, with the Internet-search company expected to hire Credit Suisse First Boston and Morgan Stanley to lead its IPO.
Wall Street has been waiting with baited breath to see what companies would be hired to guide the IPO, which is expected to generate about $100 million in investment-banking fees, not to mention bragging rights, the Wall Street Journal reported.
Morgan Stanley and Credit Suisse First Boston will act as joint book-running managers for the proposed offering.
With investor interest off the charts, the IPO could make Google worth about $25 billion — worth more than Sears, Roebuck & Co., and Marriott International Inc. Not bad for a company that didn’t exist 10 years ago. The two young computer gurus who founded the company will also become wealthier than they could ever have imagined.
Google’s IPO will test some of the new reforms that were designed to protect smaller investors from the favoritism sometimes shown to Wall Street investment-banking and trading clients, the Journal reported.
The excitement surrounding the IPO is a testament to the role Google plays in how people use the Internet and the revenue has materialized too. Advertisers are taking greater interest in using search sites to target their advertising by matching their ads with the products and services people are searching for.
Google, which is known for being secretive about its inner workings, is being pushed into the IPO by federal rules that call for some closely held companies to publicly disclose more and more information as they become bigger. These rules often result in companies filing IPOs, the Journal reported.
The Securities and Exchange Commission rule covers companies with more than 500 shareholders and $10 million in assets, which covers Google since most of its 1,000-plus employees hold stock options, the Journal reported. The rule calls for companies to file disclosures within 120 days of the end of their fiscal year, which for Google, happens this week.
Update: Google Inc., filed with U.S. regulators today to become a publicly listed company in a widely expected initial public offering. Without specifying a price per share, Google said it hopes to raise $2.7 billion with an initial public offering that’s created the biggest high-tech buzz since the dot-com bubble burst four years ago.