• by August 5, 2004

For days that turned into weeks and then months, Wall Street, the media, and tech pundits have drooled over Google's impending IPO. Google is hoping to raise about $3 billion through the IPO which could happen next Wednesday, at least that's what I'm reading.

The bankers backing the IPO should make out well -- estimates range from $50 million to $100 million. You can almost hear them salivating. Ka-ching. There hasn't been a transaction this rich in a while. On the other hand, there are 28 investment banks involved.

Meanwhile, there were storm clouds hovering as Reuters reported that Google may have illegally issued shares worth as much as $3.1 billion to current and former employees and consultants, and then offered to buy them back for a fraction of that amount. Apparently, Google hadn't registered these transactions with the SEC as required by law. The trouble was disclosed yesterday in a filing with the Securities and Exchange Commission. It's not known how, or whether this might affect the planned IPO.

The SEC filing indicated that Google offered to buy back as many as 28.8 million pre-IPO shares of stock or options for $25.9 million.

There's nothing conventional about Google's IPO. You can almost hear the strains of Sinatra's "My Way" echoing all the way from the company's Mountain View, Calif., campus to Wall Street, Washington, and Main Street. The Dutch auction-style bidding process is designed to allow "ordinary" investors to get in on the action without being squeezed out by large, institutional investors. And it's Google, not the bankers, that will retain control over when its employees can sell their shares. Normally, banks require shares to be held for at least six months to assess the deal; Google will allow employees to flip their shares just two weeks after the IPO.