Initial Public Offering

Essay by tx05University, Bachelor'sA, December 2008

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Registration, Disclosure, and Compliance IssuesGoogle had certain goals to meet before it could go public in 2004. The company seeks in investment banker to make recommendations for possible restructuring, revision of the capital structure, and the elimination of any condition that possibly be deemed as conflict of interest. Proper timing is critical to an initial public offering. The company must consider the following:The company's size and past performance thus far, future prospects and good market conditions. A registration team that consists of underwriters, accountant, securities attorneys, and company management, then a public offering date is determined. The company is required to disclose the results of operations and financial condition, the officers, the directors, the shareholders, sales, salaries and compensation of company officers, and any possible litigation. The company's once private information is now public to all that would like to look. The company must maintain compliance with all of the above while being public so that investors and stockholders can maintain knowledge of the companies business.

Cost of IssuanceGoogle's initial public offering on August 19, 2004, offered 19,605,052 millionstocks in the company. The company offered 33.6 million stocks in class A stocks and327.6 million stocks in class B stocks. The price of buying stock in Google on day onewas costing investor's 85.00 dollars per stock. It would be the eighth largest IPO inhistory, ranking higher than most that took place during the dot-com boom of the 1990s"(

The value of offering stocks is worth $1.67 billion, with an initial market cap setat $23.1 billion dollars. "Google's opening day market value of $27.2 billion is about 25percent lower than the $36 billion it would have commanded at $135, the top of itsoriginal price range" (CNN.Money). The problem Google did not command more in theprice of its original stock is...