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Google launches IPO auction

Google has opened the auction for its initial public offering (IPO), and plans to announce the pricing of its stock this week.

The start of the auction comes after the search company revealed it may have violated certain US securities laws by issuing unregistered shares to employees and consultants in the past, leading to speculation that the IPO would be delayed. The company has offered to buy back the shares in the hope of rectifying the matter.

It also faces a potential breach of a law discouraging company executives from discussing their company's prospects as an IPO nears. The September issue of Playboy magazine carries an interview with Google's founders that could be held to violate the Securities Act of 1933, though the company does not think it has broken the law. The interview was conducted in April, prior to the company's filing of its IPO papers.

Another tech company had its IPO slowed by a similar media complication. Salesforce.com postponed its offering after its chief executive officer granted The New York Times a lengthy interview, which ran as the company prepared to go public. Salesforce.com delayed its IPO date, but completed the process in June and raised $110m (£59.6m) in its debut.

The company's IPO has attracted a frenzy of attention, due to its unusual method and potential money involved. Google executives said that they chose to go public with an auction in an effort to bring more equality to the process.

The company is considered to be one of the best stock offerings the tech sector has seen since the burst of the dotcom bubble. The sale of 25.7 million shares is expected to net around $3bn. Furthermore, the company estimated that its shares will be priced between $108 and $135 each, which could value the company as high as $36bn.

Scarlet Pruitt and Stacy Cowley write for IDG News Service


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