Google Revises Price Range, Number of Shares Prior to IPO

This morning, Google made a surprise e-mail announcement to its investors, cutting the expected price range and reducing the number of issued shares in its still-pending initial public offering.

Instead of raising between $2.7 and $3.6 billion, the company now expects to generate as much as $1.9 billion for the IPO. The expected price per share has dropped from between $108 and $135 to between $85 and $95.

Google also reduced the number of shares issued from 25.7 million to 19.6 million, saying that pre-IPO investors will sell about 6.1 million fewer shares in the public offering than was previously expected. The company still expects to sell 14.1 million shares as it originally planned.

Early Wednesday, Google said it had asked the Securities and Exchange Commission to declare its registration statement effective as of 4 p.m. EST.

The company had expected to begin trading on the Nasdaq this morning, but the SEC would not give the necessary approval, citing investigations into Google's unregistered issuance of 28 million shares, and a Playboy magazine article in which the company's co-founders were interviewed, possibly breaching the "quiet period" mandated by the SEC prior to an IPO. Google stated that it does not believe the article constitutes a violation of SEC regulations.

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In reducing its estimated price range, the company's valuation drops about 30 percent, from up to $36.6 billion, to as much as $25.8 billion.

Investors and industry observers will be watching Google's stock carefully once it begins trading on the Nasdaq under the symbol "GOOG." Open market trading could begin as early as Thursday morning, pending SEC registration approval.

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