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Last Updated: Thursday, 19 August, 2004, 16:28 GMT 17:28 UK
Google shares rocket on first day
A man eyes Google search engine
All eyes on Google, the most high-profile technology IPO in years
Shares in Google have shot up 18% on its first day of trading, marking a dramatic comeback from the humiliation of its cut-price public offering.

Google shares - whose offer price had been set at $85 - ended their market debut up $15.33 at $100.33.

The price had been cut from an initial estimate of $108-135, in the face of weakness in the tech sector and several stumbles during the offer process.

The sale of 19.6m shares is expected to raise $1.66bn (0.90bn).

The Google flotation ranks as the third richest US-based IPO on the Nasdaq after Charter Communications in 1999 and Genuity in 2000.

Dutch auction

Google offered shares through a "Dutch auction" designed to give small investors a better chance of getting their hands on its stock.

Potential buyers were asked to specify both the price they are willing to pay, and the number of shares they want.

The bids were placed in order, starting with those offering the highest price. The allocators worked down the list from the top, allotting each bid in turn the shares it requests, until all the shares available had been accounted for.

The lowest successful bid then became the issue price.

Hiccups

The share sale, watched with keen interest around the globe, has already encountered some problems.

The SEC took longer to sign off the necessary paperwork than expected.

Separately, Google revealed on Monday that the US stock market watchdog had launched an informal inquiry into its failure to register shares given to employees.

Search engine market share
Google sites: 34.5%
Yahoo! sites: 29.2%
MSN-Microsoft sites: 14.1%
Time Warner Network: 12.9%
Ask Jeeves: 5.8%
All other: 3.5%
Source: Comscore Networks

The probe centres on a possible breach of US stock market rules arising from the firm's failure to register 23 million shares and 5.6 million share options it offered to employees and consultants.

The company may face fines if the SEC finds that the share issue was contrary to stock market regulations.

Google has offered to buy back the shares, but at a lower price than they are expected to reach when traded on the stock market.

There is no guarantee that the holders of the shares will accept the buyback offer. Some may choose to sue the company instead, or hang onto their allocation and sell them once the shares start trading on the Nasdaq.




WATCH AND LISTEN
The BBC's Rory Cellan-Jones
"Google's rise has been nothing short of spectacular"



SEE ALSO:
The contenders for Google's throne
22 Mar 04  |  Technology
Google market debut delayed
18 Aug 04  |  Business
Google IPO faces Playboy slip-up
13 Aug 04  |  Business
Google auction begins on Friday
12 Aug 04  |  Business
Google sets IPO bidder deadline
10 Aug 04  |  Business


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