A Better Understanding of the Initial Public Offering Process: Evidence from Google

Using the recent IPO of Google as an example, we provide empirical evidence to better understand issuers' decision process at the IPO stage. Our results suggest that Google timed its offering based on both the general market and the IPO market conditions. Selling shareholders took advantage of...

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Bibliographic Details
Published inThe Financier (Burr Ridge, Ill.) Vol. 13/14; p. 8
Main Author Li, Mingsheng
Format Journal Article
LanguageEnglish
Published Philadelphia The Financier, Inc 01.01.2006
Subjects
Bids
Initial public offerings
Search engines
SEC registration
Secondary markets
Securities prices
Shareholders wealth
Stockholders
Studies
Websites
United States > US
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Summary:Using the recent IPO of Google as an example, we provide empirical evidence to better understand issuers' decision process at the IPO stage. Our results suggest that Google timed its offering based on both the general market and the IPO market conditions. Selling shareholders took advantage of information gathered during the registration process and adjusted the number of secondary shares offered to maximize their wealth. We also show that IPO investors' investment increased the existing shareholders' wealth before trades started in the secondary market. The new issues diluted the existing shareholders' ownership, while the dilution on voting power was negligible. [PUBLICATION ABSTRACT]
ISSN:1073-7340