Google Plans to Sell Another 5.3 Million Shares
The move comes just two days before Google’s closely watched stock will be added to the Standard & Poor’s 500 index — a breakthrough that snapped the company’s shares out of a recent funk and presented management with an opportunity to capitalize on the surging demand.
In a Securities and Exchange Commission filing late Wednesday, Google said it expects to sell the 5.3 million shares primarily to index funds who must own a stake in the company because it’s now in the S&P 500. Google’s market value has climbed by more than 15 percent since Standard & Poor’s said it would include the company’s stock in the blue-chip bellwether.
Based on Wednesday’s closing price of $394.98 on the Nasdaq Stock Market, Google’s offering would raise about $2.1 billion.
But news of the offering raised a red flag for some investors worried that extra shares will make it harder for Google to reach the lofty earnings-per-share target set by analysts. Google’s shares dropped $12.09, or 3.1 percent, in extended trading.
The additional shares sold in the offering means Google will probably have to earn an additional $45 million to $50 million this year to match the average earnings estimate of $8.82 per share among analysts polled by Thomson Financial.
The company expects to have 305.4 million shares outstanding after the latest offering, up from 271.2 million shares at the time of its IPO. Google’s market value has increase by about $100 billion since the company went public.
source: yahoo



