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Google Files to Sell 14.2 Million More Shares 407

dabug911 writes "Google Inc. on Thursday said it has filed with the Securities and Exchange Commission to sell 14.2 million shares of class A common stock, an offering worth more than $4 billion at Wednesday's closing stock price. Could they be getting the money together to finance all these rumors we keep reading about?"
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Google Files to Sell 14.2 Million More Shares

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  • by Oculus Habent ( 562837 ) * <oculus DOT habent AT gmail DOT com> on Thursday August 18, 2005 @02:29PM (#13349591) Journal
    Google has announced plans to buy NASA from the United States government. In a press release sent out this morning by Nathan Tyler, Google indicated the need for better, more direct access to the data it manages.

    In a brief interview this afternoon, Tyler had this to say:

    "I mean, after Maps [maps.google.com] and Earth [Google Earth], it was pretty blatant where we were going. Everyone on campus was asking, 'When are we buying NASA?'. The NASA acquisition will offer us access to a variety of communications avenues that would have cost a fortune to contract. Also, it's imperative for our upcoming Google Earth Live... but I've said too much."
  • by 1992 Called ( 893858 ) on Thursday August 18, 2005 @02:29PM (#13349594)
    They want their pre-bubble investing environment back.
  • by Anonymous Coward on Thursday August 18, 2005 @02:30PM (#13349604)

    And fire all the reporters.
  • by ReformedExCon ( 897248 ) <reformed.excon@gmail.com> on Thursday August 18, 2005 @02:33PM (#13349633)
    Google is profitable. Can they remain so?

    Whether or not these dilute the current holdings, the company has a very nice financial profile. It will be interesting to see if they can keep profits up while they start to expand.
  • Could they be getting the money together to finance all these rumors we keep reading about?

    Or are they cashing their extremely inflated stock?

    • Or are they cashing their extremely inflated stock?

      That's what I'd do. Cash in and after the bubble bursts buy it all back at a reduced price. Sounds smart to me - unless of course the SEC frowns on that.
    • No, they are issuing new stock. Various Google execs cash out all the time, which isn't news for any publicly traded company.

      Today's issuance of new stock is why the price is down almost 7 bucks today...dilution.
    • They have considerable real assets, a 20% profit margin, the strongest brand in their industry, and an employee roster that holds some of the best minds in the business, how exactly are they extremely inflated?
      • how exactly are they extremely inflated

        Because their P/E is about 60% higher than the average in their industry? And because they are sing increased competition in their core business areas. I wouldn't buy their stock at this price. That said, their net results are extremely impressive so I don't think they are "extremely" inflated.

      • They have considerable real assets, a 20% profit margin, the strongest brand in their industry, and an employee roster that holds some of the best minds in the business, how exactly are they extremely inflated?

        No one is saying they're not good. It's just that they're not that good.

  • by Anonymous Coward
    We are going to conquer a country. That 200 billion dollar in cash for arms and infantry doesn't just pay for itself you know. We expect to need 40.000 troops to take Syria, and 200 troops to completely overwhelm the Dutch army.
  • by Cerdic ( 904049 ) on Thursday August 18, 2005 @02:37PM (#13349690)
    Google, operator of the leading Internet search engine, said it intends to use the net proceeds from the offering for general corporate purposes, including working capital, capital expenditures and possible acquisitions of other businesses or technologies.

    The company, however, said it has no current agreements or commitments to any material acquisitions. Pending acquisitions, Google plans to invest the proceeds in highly liquid, investment-grade securities, according to the SEC document.

    I think that very nicely clarifies what is going on. Very clear and quite obvious. Yep.
    • 'Highly liquid' is bizspeak for 'cash to wave in peoples faces'.
    • In unrelated news, Savantissimo is issuing 14 million shares in his holding company, which has a diversified portfolio of obsolete computer equipment, stale nachos, tatty SF books as well as a marginally serviceable toothbrush. Liabilities disclosed in the filing include one lazy know-it-all Gen-Xer. Offering price will be $285 per share.

      Savantissimo Holdings International Tippling said it intends to use the net proceeds from the offering for general slacker purposes, including non-working capital, capital
  • Or maybe... (Score:4, Interesting)

    by cavemanf16 ( 303184 ) on Thursday August 18, 2005 @02:39PM (#13349705) Homepage Journal
    They're just selling additional shares to bring that $300/share price down a bit. You don't want to have your stock all held by the big boys of investing who will turn on you and your company on the proverbial dime. Better to involve the smaller investors too so that one less-than-incredibly-spectacular SEC quarterly filing won't tank your stock. Companies need to diversify their investments just as much as us individuals do.
    • by bigtallmofo ( 695287 ) on Thursday August 18, 2005 @02:50PM (#13349803)
      They're just selling additional shares to bring that $300/share price down a bit. You don't want to have your stock all held by the big boys of investing who will turn on you and your company on the proverbial dime.

      Taking any action to purposely bring down the value of your company would be illegal. If they wanted to make a more attractive price point to fool investors without $300 into buying their stock because it appears cheap, that's what a stock split [wikipedia.org] is for.
      • Taking any action to purposely bring down the value of your company would be illegal

        True, but lowering the share price and lowering the value of the company are different. There is nothing illegal about issuing shares to bring down the share price - it's just not very sensible.

        • lowering the share price and lowering the value of the company are different. There is nothing illegal about issuing shares to bring down the share price - it's just not very sensible

          Hogwash. Issuing shares is a neutral event in terms of share valuation. The company ends up with more shares, but it also has more money, which increases the value of the company. Assuming the shares where fairly priced, divide the new value of the company by the new number of shares and what do you get? Why, the same numbe
    • The usual way to bring down share price while maintaining value is to split the stock [wikipedia.org]. In a 2-1 split, that roughly means each $200 share turns into two $100 shares. No sane company wants to intentionally reduce their market capitalization..
    • If they wanted to bring the share price down, they would do a stock split. That is in fact the entire purpose of splits. It reduces share price without reducing stock value.

      Issuing shares is for raising money. It lowers the price and reduces the value of existing shares. Existing shareholders are hurt by new stock issues.
    • Better issue a stock split for something like that as others have said.

      If I was a skeptic, I'd rather guess they want to pay the banks handling the offering(Morgan Stanley, CSFB and Allen & Co.) to mend any potential problems the auction IPO caused between the banks and Google, but I don't think that's the reason either.
  • Just Jealous (Score:3, Interesting)

    by Dink Paisy ( 823325 ) on Thursday August 18, 2005 @02:39PM (#13349707) Homepage
    Google wants to have a bigger market cap than Microsoft, of course.

    Why? What did you think they were going to do? Free wireless access, with a VPN client that also delivers advertising (textads only, no flash animation) based on the web page you are currently looking at, or based on your browsing history if you aren't looking at web pages? With direct support for Internet Explorer, and support for alternate browsers if you use the Google Web Accelerator?

  • ...the Google business model, evidently. How is it that Google makes money, exactly? Is it all based on sites paying them to be listed when you search? Surely AdSense doesnt make this kind of loot.

    Sorry for the dumb question. It just came to me when I was reading the story.
  • by WillAffleckUW ( 858324 ) on Thursday August 18, 2005 @02:42PM (#13349735) Homepage Journal
    And I say this as someone who's been investing since the 1970's and didn't panic during the IPO craze of the late 90's - which was very very good to me and my family ...

    Just because a stock is valued at $XX today doesn't mean it can't just as easily go down as up.

    And when something is new to the market, valuation is still uncertain and the risk of it going down - contrary to most investors expectations - is higher than the risk of it going up.

    However, as a caveat, I should say that some of the secondary offerings and post-IPO investments in certain companies have been very very profitable for me - Red Hat, Coach - which I bought at IPO, held for a bit, sold all or part of, and bought back in when most insiders unloaded their shares.

    So, it's more a question of: Is Google worth MORE than this valuation in the future and is this BETTER than other investments?

    I'm putting money in Japan and Euro value plays mostly - with money in dividend yielding energy stocks that AREN'T oil-based (wind, solar, geothermal, nuclear fission, clean coal).

    But if you want to spend your money, do what I do - never invest more than you can lose, and if it's risky - unless you're really really certain [e.g. RedHat or Coach in my case] - spend LESS than on a typical investment.

    For example, I usually invest around $10,000 in a normal investment, $5000 in a slightly risky investment [a hunch], and $1000 in a highly risky investment [most IPOs and risky stocks].

    Your mileage may vary.
    • For example, I usually invest around $10,000 in a normal investment, $5000 in a slightly risky investment [a hunch], and $1000 in a highly risky investment [most IPOs and risky stocks].

      There's nothing worse than being right about an investment for the right reasons, but failing to put a decent amount of money into it.

      There's a reason why you want to invest a reasonable amount in every stock. It's so that you seriously think and research it before pulling the trigger.

      If you invest too little in a st

      • I wish I had your level or resources to spend on beer.

        P.S. Can I come over and have a sip of one of your 1000 dollar beers I bet they taste a lot better than the $14 a case stuff my budget can afford.

      • I invested a reasonable amount during the .com boom era. And when it tanked, I lost an insane percentage. I still have a very bitter after-taste investing in tech stocks.

        What's even more sad is I tried alot of different funds and investment types. Nothing guarantees you 6 months to 1 year profit like a 3% CD account. Everything else seem to go up a week, and down a week.

    • Two things

      1. Google is better than any investment in the world right now. Their brainpower puts Mensa to shame.

      2. Stop giving investment advice on the internet. No one asked and no one who is in their right mind would log onto their ETrade accounts after reading the ramblings of some Slashdot poster.
    • A "Secondary" Inital public offering is a contradiction in terms. It's NOT another "inital" public offering...it's just an offering of stock
    • The question you would actually be betting on is "Google, the hottest, most hyped stock of recent times, is about to do something big. 4 billion dolars big. Will the market get exited about it?"

      Google introduces nation-wide free wireless; Massive exitement.

      Google buys Apple; Massive exitement.

      Google buys TimeWarnerAOL; less exitement.

      I dunno. But some are more likely than others, and it seems likely that the market will hype it.

    • I think you just meant secondary public offering [fundingpost.com].
  • 1.IPO 2.Buy moon 3.Secondary IPO 4.Buy super-laser 5.??????? 6.Biiiiiiiiiiiiiiilliiooooooooooons in profits!
  • by amichalo ( 132545 ) on Thursday August 18, 2005 @02:47PM (#13349776)
    Okay, so GOOG is trading near $300 a share and they want to raise some more capital - great. Just help me understand where their money comes from.

    As best I can tell, Google makes money on:
    (1) AdWords (is this like 90% of their revenue?)
    (2) Intranet searching licenses for those sites who allow you to search it with a Google search, but maybe this is a free service Google offers
    (3) They sell those yellow Google blade servers that look cool but I think accomplish the same as (2) above.

    So how else does Google make money? Every damn thing is free. Gmail, maps.google.com, Google Earth. As a consumer I am not complaining, but as an investor, I won't touch GOOG with ten feet of CAT6.
    • You're exactly right. Google makes billions on advertising. They're an advertising company. They compete with DoubleClick and Yahoo!. Everything they do on the customer side is about making users see and click on Google ads.

      Most of their other products are in beta anyway, so they don't count.
    • No, no, no! (Score:3, Interesting)

      by solomonrex ( 848655 )
      So what? TV networks make billions and everything they sell is free. This is like that, only with 2 big differences:

      1. Google has perhaps loaded up on more talent in their field than any company since Edison.
      2. They aren't actually breaking new ground yet. They're just executing an existing industry/strategy - online search funded by online ads - better than anyone else.

      And difference #2 is good news for investors. They aren't a bolt of lightning like Netscape, they more or less earned their good fortun
    • Every damn thing is free.

      Everything is free, but they make up the difference in volume.

    • by ddebrito ( 33316 ) on Thursday August 18, 2005 @03:43PM (#13350255)
      Google has huge potential for services based on their server farm/architecture. For example:
      Google could sell company denial-of-service protection. Traffic could be routed through google's farm. Google could filter the wheat from the chaff. Also google know lots about valid clients via GoogleCaching, cookies, GMail accounts, GoogleDesktop, etc...
      Google could automatically vet valid clients versus zombie attackers. With googles huge server farm it could withstand a zombie attack of a hundred thousand boxes.
    • by Coward Anonymous ( 110649 ) on Thursday August 18, 2005 @04:19PM (#13350536)
      Apparently a relatively large chunk of their revenues is derived from domain park [google.com]
      • by hackstraw ( 262471 ) * on Thursday August 18, 2005 @05:18PM (#13351027)
        You have got to be kidding?

        Those "domain park" sites are often up in the google search hits, and they are useless when I accidentally click on one of them. I've learned how to visually filter them out now.

        If that is really a good source of income for google, I would assume that this is only as temporary as the "put it on the web and make millions" that happened in the late 90's and early 00's.

        Sure people may click though them now, but I don't see this lasting.
  • by alvinrod ( 889928 ) on Thursday August 18, 2005 @02:48PM (#13349792)
    Although it will help them take in a little bit more money to finance any plans that they might have to expand the business, in the end I think it really just hurts them more.

    After all, the people who buy into Google really don't give a shit what it does or how it does it as long as it makes money and pays good dividends. I don't know exactly what portion of Google will be in "public hands" after this, but if they've sold off enough of the company they could just wind up like almost every other company in the business.

    Maybe I'm sounding a little paranoid, but I really think that going public and giving partial ownership of your company to people who don't share your creative vision is just a bad idea. I don't invest in the market myself, so I can't speak for everyone, but isn't the point to make money? Eventually a unique company like Google that's been pushing new and innovative technology and forcing competitors to work just as hard to keep up, will eventually stagnate and become more of a conservative business that would rather rest on its laurels and make money rather than strike out an pioneer new grounds in the industry.

    Would a company all about the money offer 2GB email inbox sizes, a wonderful and easy to use online mapping service, and a great search service? Personally I think they'd turn out a little more like Microsoft, spending more time talking about all the innovative things they're doing rather than actually doing them and settling into a state of mediocrity.

    • Two things,

      1. There's voting class shares, then there's non-voting class shares. The majority of voting class shares is still held by the company, by the founders in fact. Control of the company has never been an issue.

      2. Google isn't generous. They're smart. They're not offering free email boxes to be nice. Nor are they offering free mapping services to be nice. Google is an advertising company. In order to advertise at your best you need all the information about your demographic that you can get. Google
  • I smell a new golden age for the repo business...
  • by slashdot.org ( 321932 ) on Thursday August 18, 2005 @02:54PM (#13349844) Homepage Journal
    The article says that one of the things they need the cash for is possible acquisitions. It seems they are acquiring a lot.

    One of the recent ones that I have not read about on slashdot is android [businessweek.com]

    What's interesting about that one is that it's being speculated that they have been creating an Operating System for cell-phones.

    (That should be enough to have another 50 stories on slashdot about people pondering what technology is going get involved with next. ;))
  • Short Google!
  • by Mr. Flibble ( 12943 ) on Thursday August 18, 2005 @03:00PM (#13349897) Homepage
    I think that Google is a great company, but I cannot see how their insane stock price is justified. It is all just speculation.

    [url]http://finance.yahoo.com/q/bc?s=GOOG&t=1y%5B/ url%5D [yahoo.com] I mean, check out their P/E ratio!

    Google is very cool, and their mission is basically to become the next library of Alexandria, which I think is awesome. However, how on earth do they plan to make any MONEY?

    (For those of you who are considering buying some of this new issue, I strongly suggest you read 2 books: "The Intelligent Investor" By Ben Graham and "The Future for Investors: Why the Tried and True Triumph Over the Bold and New." by Jeremy J. Siegel.)

    Google is very cool - but it is really just grep on steroids. I can't see how shares in this company at this point will benifit the shareholder.
    • However, how on earth do they plan to make any MONEY?

      If Google was in any position to make tons of cash in comparison to current stock prices, you wouldn't see the enormous insider trading that's been going on. Many highly-ranked employees have already sold most of their stock, and that's a pretty clear indication that the stock is badly overvalued. In fact, if anything it means that the employees in question think that the stock price will drop precipitously when the current speculation craze comes to an
  • I've seen comments in a few places that suggest that imeem [imeem.com] is linked with Google. There was a story yesterday asking whether imeem was the next google? It's like a client application that does everything you'd ever need, it apparently caches and indexes content so that search queries get shared amongst the clients in the network and data gets swarmed out. Brilliant idea, but has anyone else heard the google rumours?
  • by rlp ( 11898 ) on Thursday August 18, 2005 @03:03PM (#13349921)
    Time to buy a TON of Google! This time is REALLY different! I'm pouring everthing into Google! Just as soon as I finish selling all of these tulip bulbs ...
  • by dubbayu_d_40 ( 622643 ) on Thursday August 18, 2005 @03:05PM (#13349947)
    14.159,265 million shares to be exact. 3.14159265... Cute...
  • A good analogy for what Google did was first they got one credit card (the IPO). They maxed this credit card out with lots of hirings and acquisitions (Dodgeball?). Now to stay competitive with MS and Yahoo they need to get another credit card....maybe to buy that Chef they were talking about. However, unlike any normal kind of debt, they have no obligation to pay it back, or even pay interest (a dividend) on this. They probably figure their earnings will suck for Q3, so they might as well get as much c
  • Smart move! (Score:2, Insightful)

    by Dobeln ( 853794 )
    Rule number one (or perhaps ten) in corporate finance: If your stock is overvalued - issue more shares!

    Benefits the original shareholders handsomely, and if your stock is hyped enough, you will not suffer any "pecking order" side effects.
  • by Lawrence_Bird ( 67278 ) on Thursday August 18, 2005 @11:17PM (#13352885) Homepage
    sorry so late but was out of office today.. so this google
    offer is unusual in that the vast majority of aquisitions are
    stock based, sometimes with a cash kicker but rarely all cash
    except for relatively small deals (a few 100 million).

    So why does Google go this route of raising cash first when
    they already have about 2.5B in liquidity? My suspicion is
    they either a)expect a significant decline in the stock
    price and are taking advantage of the current high price to
    increase liquidity (note they said general corporate purposes
    which does not in any sense obligate them to make a takeover),
    b) expect a significant decline in their stock price which
    could present difficulties for an all stock deal and hence
    wish ot increase cash on hand in case it is needed to
    sweeten the pot

    This also could be, though a review of the original filing
    would be needed, a way for the insiders to unload some
    stock down the road. Issue new stock today to raise cash,
    buy some company down the road for stock, arrange an
    internal private equity deal where insider sells all or
    some portion of the necessary shares back to the company and
    receives cash at the current market price. This would be
    advantageous to the company were the stock price below where
    they float this new offering as they would have excess cash
    left on the books.

Matter cannot be created or destroyed, nor can it be returned without a receipt.