Google announced a second round of 14,159,265 shares Thursday that could bring in about $4 billion if the current price holds; the stock closed down slightly at $279.99 but was up in after-hours trading. Underwriters Mogran Stanley, Credit Suisse First Boston and Allen & Co. can purchase up to an additional 600,000. According to the prospectus, the net proceeds, which could more than double Google’s cash stash, are to be used for general corporate purposes and “possible acquisitions of complementary businesses, technologies or other assets.”
The prospects raised by the latter — particularly by a company that so far has made acquisitions so small the prices don’t have to be disclosed as material — sent minds spinning at high RPMs. The understatement of the day may come from Merrill Lynch analyst Lauren Rich Fine in her client note: “Speculation is Rampant Regarding Timing and Use of Funds.” Fine brings up Googl’s interest in Baidu before the Chinese company’s IPO, writing, “We have no insight
into this, but note that it, in our view, would be a good strategic fit.” (Google holds 2.5 percent of Baidu.) She adds, “Other names that have been mentioned include Tivo and Infospace. There has also been speculation regarding their interest in offering free Internet access and could be interested in going into the carriage business.”
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