Google is going for another secondary public offering, the third time it is offering fresh shares to the public.
Google announced yesterday plans to offer 5,300,000 Class A shares to coincide with it being added to the S&P 500 tomorrow. Based on today’s opening share price of $394.98, Google could net $2,093,394,000 on the sale, giving them a lot more money to use on the massive capital investments needed to get big, fast.
Now, this is the second time since the IPO they’ve done this, basically affirming that Google looks at the popularity of the stock as a resource they can exploit to get lots of cash. I don’t know if this is a common practice, but I certainly can’t remember Microsoft or Yahoo ever doing it. Of course, it is possible they did, and I just wasn’t paying attention when their stocks actually had upward movememnt.
Is Google diluting the stock? Would it have been wiser to wait for the stock to reach its previous high before doing this? Does Google believe that, with the S&P, it hsa nothing to fear anymore regards to the stock? Tough questions. We’ll see how smart they are, and how Wall Street reacts, in the coming weeks/months.
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Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search engines.
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