Google floats, shares rise 17%

INTERNET group Google finally floated on the Nasdaq stock market today, with shares quickly trading up 17% to $100 (£57). It ended a flotation process plagued by problems and marked by a dwindling appetite among investors for the shares.

Investors in the world's most popular internet search engine bought the shares at a reduced price after participating in an unconventional pre-float share auction.

The firm's march to market has been bedevilled by difficulties. Earlier today it was forced into a humiliating reduction in the price at which it finally sold its shares to investors ahead of public trading.

Google cut the value to just $85 (£47) a share, a far cry from the $135 at the upper end of its original target range in set in July, and at the bottom of the revised $85-$95 estimate it set yesterday.

Analysts said selling the stock at the lowest end of an already reduced range was necessary to help get the troubled issue away, but it should also help limit selling pressure and increase the prospects of the shares closing at a premium today.

'The good news for Google is that it didn't price below the low end,' said Tom Taulli, cofounder of research company CurrentOfferings. The last-minute price cut also reflected the current doldrums of the US listings climate.

Google also reduced the number of shares sold to 19.6m from 25.7m. At the high end of the original estimate, the company would have had a market capitalisation of $36bn. At $85 a share, it is still valued at $23.1bn. However, it will now raise only $1.67bn, much less than previously expected.

The initial public offering, which was finally signed off by the Securities and Exchange Commission, the US regulator, last night, is still one of the biggest and most highly anticipated for an internet business.

It catapults Sergey Brin and Larry Page, who founded Google six years ago, into the ranks of US paper billionaires.

Google has been accused of mismanaging the float and remains the subject of an 'informal inquiry' by the SEC into the how it awarded stock options to employees.

'It's a dog's breakfast' was how David Buik of Cantor Index assessed the company's stumbling progress to market.