Google delays IPOs by some days

Google’s offering, which a few months ago was generating excitement for its potential to reinvigorate the market for technology stocks, is now facing increasing scepticism from investors big and small who see the company’s price targets as too expensive and the auction as too cumbersome.

Some investors predict that Google will have to push the offer into September or even reduce the number of shares it plans to sell. Google and its underwriters declined to comment.

Investors must register in advance to participate in the auction for Google shares. Last Friday, Google activated a registration Web site for individual investors. But the site for institutional investors has been delayed.

Because the company’s underwriters want to give institutions several days to register, the delay is pushing back the earliest start date for the auction. The company is also awaiting approval by the Securities and Exchange Commission for a variety of details involved in the offering.

So far, there are few signs of the kind of mass interest that would create the bidding frenzy needed for Google to sell the 24.6 million shares it is offering for more than $3 billion. Comscore Media Metrix, which monitors traffic to Web sites, said that the traffic to the registration site for individual investors, ipo.google.com, was less than its measurement threshold of 50,000 visitors a day. It does not help Google’s situation either that it has had to acknowledge that it violated federal securities law for the last four years when it issued stock to employees and early investors without registering the shares with the SEC.

On Wednesday, Google filed a draft of a proposal it will make to 1,400 of those employees and investors, offering to buy back their shares and stock options.

The company said in a filing with the SEC that since 2001 it should have registered its shares with the agency and disclosed its finances for the benefit of potential investors. David Krane, a Google spokesman, said the violation was disclosed in the initial prospectus for the public offering, which the company filed in April, which also detailed its plan to buy back shares. He declined to say why the company violated the rules initially.

(The New York Times)