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Tech Cash Slashed? Learn From Google

Ever get that sinking feeling after the bean counter has come into your office to tell you about the slash in your IT capex budget?

Google's having that kind of day. The company's feeling the IPO pinch after filing SEC forms today, revealing its newly lowered IPO expectation to sell a total of about 21 million shares at a price range of $85 to $95 each. (Google's latest filing is here.)

That puts a serious dent in the size of the IPO. As now proposed, the IPO would raise as much as $1.9 billion at the top end of the proposed price range, down from $3.5 billion if the shares had priced at the previous range of $108 to $135 per share. The reduction in shares comes mostly from insiders, including CEO Eric Schmidt and co-founders Larry Page and Sergey Brin, who cut the number of shares they plan to sell in half, from 11.6 million to 5.5 million. Google itself still plans to sell about 14 million shares. But here's the question, as raised by some of our topnotch Wall Street sources: Now that those insiders have scaled back their selling plans for the IPO, doesn't that just leave more of them to dump after the issue starts trading? Many of these shares will be locked up against selling for some time, but Google's lockup expiration is laxer than most IPOs, with the first lockup period expiring a mere 15 days after the IPO starts trading. The most skeptical sources we spoke with are raising eyebrows at this, wondering how this reduced IPO will perform in the aftermarket with a insider overhang such as this.

Read the full article on our sister site, Next-Gen Data Center Forum.

— Evan Koblentz, Senior Editor, Next-Gen Data Center Forum

whyiswhy 12/5/2012 | 1:21:11 AM
re: Tech Cash Slashed? Learn From Google Google's Dutch auction IPO process is a slap in the face to investment bankers, which is why it can be expected to rise in the coming months...it's honestly priced.

And you know the IB's hate the idea of stock options for any employee (even the CEO), unless it's part of a insider deal they are cooking up.

Overhang, schmoverhang. Share the wealth or get nothing better than average.

Attention Wallstreet greedmeisters: You like IPO's, you gotta pay for them.

Tight market: It works both ways.

ROTFLMAO!!!!

Go Google, Go!

-Why
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