Google shares made their long-awaited stock market debut yesterday, rising sharply to $100 (€80.86) after an initial public offering marked by missteps and lacklustre market conditions.
Google co-founder Mr Larry Page and chief executive Mr Eric Schmidt, guarded tightly by security, were at the Nasdaq stock market's broadcasting facility in Manhattan as the web's most popular search engine began trading as a public company.
After ending its unconventional auction to price and sell the shares on Wednesday, Google sold 19.6 million shares at $85 each, raising $1.67 billion, the biggest IPO so far by an internet company.
The shares ended trade at $100.34, up $15.34, or 18 per cent.
"There were a fair amount of institutional buyers that stayed out of the auction but came in \," said Mr Martin Pyykkonen, an analyst at Janco Partners. "I see a floor in the $90s."
A few minutes before the shares officially opened for trading, the market saw a false start when the shares appeared to debut at $136. A Nasdaq official said this was the result of two trades that "should not have gone through." Nasdaq declined to comment further.
On Wednesday, Google slashed the expected price range on the shares to between $85 and $95, down from a previous range of $108 to $135. It also cut the number of shares offered to 19.6 million from 25.7 million.
One fund manager said the lowered price might invigorate investor interest. He said he might buy Google shares in the next few days, depending on how they performed.
"At $108 to $135 a share, it was too expensive," said Mr Douglas Wright, a portfolio manager for Britannic Asset Management in Edinburgh. "But now we have a much more comfortable valuation."
The pricing revision came as Google disclosed that the US Securities and Exchange Commission had requested additional information about a recent Playboy magazine interview with the company's founders.
Though Google confronted a jittery investor public - about two-thirds of this month's IPOs have priced below their estimated ranges, according to Thomson Financial - market conditions were not purely to blame.
Google has said the SEC staff intends to recommend the agency pursue civil penalties against the company's general counsel. The SEC has also started an informal inquiry into Google's offer to buy back 23.2 million shares it may have issued illegally.
The company reiterated on Wednesday that it does not believe the Playboy interview violated US securities rules.
Many investors said Google's initial price range was too optimistic. Some fund managers thought even the lowered price range was on the rich side.
Yahoo, seen as a comparable stock to Google, closed down 1.3 per cent at $28.11 on the Nasdaq. - (Financial Times Service)
