What a difference a year makes! Today (Aug 18th) Google filed to sell an additional 14 million shares in a secondary offering. At the current price $280-$290 per share, that will add a few billion of cash to their current $3B warchest leaving them with $5-$7 billion of cash and growing. While others in the media are reporting this offering will add $4B of cash (14M shares * $280 per share), I predict this will not be the case. Usually, in these situations, the insiders (Larry, Sergei, Kleiner Perkins, Sequoia, etc.) take the opportunity to unload/diversify a large amount of their holdings and thus the cash raised does not flow through to the company's bank account.
But the real story here is what a difference a year makes! This secondary offering (exactly 1 year later) is the effective equivalent of a 33 million share offering at $168 per share. When Google initially filed last year at their $135 range, they were scoffed out of the market by literally everyone (I was certainly on that bandwagon) and subsequently forced to drop their offering (number of shares sold and their IPO price) all the way down to $85 per share (37% price reduction).
After several false starts and auction process communications bungling, they eventually limped out the door and sold 19 million shares at $85 per share on Aug 19, 2004 for $1.6 Billion of cash. Since then, however, their exeuction and stock price have gone virtually straight up.
Kudos to Google for making hay while the sun is shining.
Link: Google files to sell 14.2 million shares.
Link: My Blog Series Covering Last Year's IPO
Full Disclosure: I still own the original 7 shares I was allocated at $85 per share last year that I bought to simply be "part of the auction process. I laugh everytime I think of owning 7 shares of anything...but I'm no longer laughing at the +200% return on those shares.
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