No. 1 Internet search engine still waiting for SEC to give final green light before pricing stock.
August 17, 2004: 6:21 PM EDT
By Paul R. La Monica, CNN/Money senior writer
NEW YORK (CNN/Money) - Investors will have to wait a little longer for the Google initial public offering after the SEC said the company's registration statement was not declared effective by the close of business Tuesday.
The official would not say why the company's IPO statement was not declared effective.
Google said in a statement on its IPO web site Monday that it had hoped the SEC would do so by 4 p.m. ET Tuesday, adding it could price the deal shortly thereafter. That led to speculation that the IPO would price on Tuesday and begin trading Wednesday.
But it now appears that the earliest the deal could be priced is Wednesday morning, assuming that the SEC gives the final go ahead then. Google did not return a call seeking comment.
One analyst following the Google IPO said investors should not read anything into the latest delay though.
"There's nothing that mandates the SEC had to comply with the request in the timetable expected by Google," said Scott Kessler, an equity analyst with Standard & Poor's.
Kessler added that the SEC may just simply be taking extra care in going through the details of approval since the offering was being so widely scrutinized.
"There is a lot of pressure on the SEC to ensure that this process is in full compliance with all governing rules and regulations. As high profile as this offering is, it puts a substantial onus on the SEC, so that's why it might be taking more time than expected," he said.
Still, the setback is the latest in a series of strange twists and turns in the IPO process for the No. 1 Internet search engine, which filed to go public in April. At the time, Wall Street raved about the company's leading position in the hot market for search-based advertising and marveled at its sales in the last few years. But in recent months, the enthusiasm waned.
There was a fair amount of confusion surrounding the controversial Dutch auction process the company chose to sell its shares. Google has also warned that it may have violated securities laws by failing to properly register shares and options it awarded to current and former employees.
In addition, Google, based in Mountain View, Calif., is going public when investors are worried about a possible slowdown in tech spending in the second half of the year. Internet stocks in particular have been hit hard due to concerns about their heady valuations.
Google is hoping to sell up to 29.6 million of its 271.2 million shares outstanding in the offering. Once the company begins trading, it will do under the ticker symbol GOOG on the Nasdaq.
The company established a preliminary price range of $108 to $135 a share for the stock last month.
David Garrity, an Internet stock analyst with Caris & Co., said he was getting the sense the stock would price at the low end of that range.
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