Reporter Verne Kopytoff of the San Francisco Chronicle wrote a fascinating article yesterday about Google’s arduous quest to get SEC clearance to launch their IPO last year. The paper had filed an FOIA request with the SEC, and was able to review the extensive correspondence that took place between the agency and the search giant.
The SEC apparently took a dim view of the idealism that Google founders Larry Page and Sergey Brin wanted to convey in the S-1 (an early version of which is here). The SEC didn’t like use of the first names of key Googlers, wanted more disclosure on privacy issues related to Gmail, and was not amused by the interview Larry and Sergey gave to Playboy (work-safe link here courtesy of Jason Kottke for those who don’t read it for the articles). The auction-style offering terms undoubtedly also gave the SEC pause.
And Mr. Kopytoff reports that before the IPO could proceed, the SEC needed something more:
… Google’s attorneys were required to draft a letter agreeing that anything said by regulators in prelude to the IPO could not be used later as a defense in any trial.
So as we head to the first anniversary of the Google IPO on August 18th, thank goodness the SEC dragged them around Wall Street by the ear for awhile. Many investors (such as yours truly) thought it might be just another dot-bomb. The 52-week range is 95 on the low side and 317 on the high side. GOOG opens today at 289 and change.
I would hate to have this sort of nonsense mucking up my portfolio.
Update (18 Aug 05 AM): Broc Romanek at TheCorporateCounsel.net Blog provides additional information (see entry at the bottom of the page) and a kind link. More on the Tandy letter concept is provided by Mr. Romanek here.
Update II (18 Aug 05 PM): Google announces this morning plans to raise an additional $4 billion with a follow-on stock sale of over 14 million shares. The Google form S-3 explains more, as does their press release. When an audience is clamoring for an encore, give it to ’em.