NEW YORK – Google Inc. (GOOG), the world's most popular Internet search engine, on Wednesday is set to begin a stock sale that could net more than $4 billion in proceeds, according to data provider Dealogic (search).
Google went public in August 2004 and announced the follow-on offering in a regulatory filing last month. It has said it expects $4.11 billion in net proceeds from a shelf offering of 14.16 million Class A shares.
Sparking interest in the stock sale are the enormous gains reaped by shareholders who took part in the initial public offering. The scarcity of the company's shares compared with other new IPOs helped to fuel demand.
Google shares came to market at $85 and touched a record high of $317.80 in July. While its stock was down $1.98, or less than 1 percent, at $309.70 in Nasdaq trade, analysts say the shares are still up about 10 percent since the company announced the offering.
"There has been a lack of liquidity, and this certainly makes more shares available to institutional investors," said Susquehanna Financial Group analyst Marianne Wolk.
The follow-on offering was expected to price after Wednesday's market close in New York and go to the market on Thursday, according to data from Dealogic, which specializes in IPOs.
Lead underwriters CSFB and Morgan Stanley declined to comment on any timing of pricing the offering. Allen & Co is also a lead underwriter, with 17 other co-managers involved in the deal, according to this month's SEC filing.
Google has said proceeds from the follow-on offering will go toward general corporate purposes, including working capital, capital expenditures, and acquisitions of complementary business, technologies or other assets.
Analysts have interpreted this to mean Google could be on the lookout for acquisitions as a way to drum up new revenue as quarter-to-quarter revenue growth from advertising dollars may slow amid fiercer competition from rivals Yahoo Inc. (YHOO) and Microsoft Corp. (MSFT).
Google said total proceeds could reach $4.29 billion if underwriters exercise their over-allotment option to buy an additional 600,000 shares.
The offering will increase the amount of the company's Class A common stock outstanding by about 8 percent.