[FoRK] From the "oops" department

Luis Villa luis.villa at gmail.com
Thu Aug 5 22:35:13 PDT 2004

Google is going to screw up even bigger one of these days. Sadly,
large corporations are the stultifying places that they are because
they are risk-averse- google seems spectacularly pro-risk, which will
make for a great ride, but probably a spectacular screwup or two along
the way too.


On Thu, 5 Aug 2004 09:33:43 -0500, Jeff Bone <jbone at place.org> wrote:
> Note to self:  never accept share certs torn out of notebook and
> written by hand...  ;-)
>         http://www.wired.com/news/business/0,1367,64476,00.html
> Google Cops to Illegal Shares
> Associated Press
> Story location: http://www.wired.com/news/business/0,1367,64476,00.html
> 05:35 PM Aug. 04, 2004 PT
> Google may have illegally issued more than 23 million shares of its
> stock to hundreds of employees and consultants, injecting an unexpected
> legal risk into the online search engine leader's highly anticipated
> IPO.
> The Mountain View-based company disclosed the possible violations
> Wednesday in a prospectus offering to buy back the affected shares and
> outstanding stock options for a total of $25.9 million, including
> interest payments.
> With $549 million in cash as of June 30, Google can easily afford to
> make amends.
> But it's uncertain whether the gesture will satisfy everyone affected
> by potential bureaucratic blunders that occurred from September 2001
> through June 2004.
> During that time, the company says it neglected to register 23.2
> million shares of common stock and 5.6 million outstanding stock
> options with securities regulators. The oversights might have broken
> federal and state laws, according to Wednesday's filing. The affected
> common stock is owned by 1,105 current and former employees, as well as
> company consultants.
> Google warned that its buyback, or "recission," offer may be rejected
> by some people who prefer to sue the company. Google believes it faces
> potential liabilities in 18 states and the District of Columbia, as
> well as federal court.
> It's unclear whether Wednesday's twist will affect the timing of
> Google's initial public offering -- a deal expected to raise up to $3.3
> billion, with roughly half of the money flowing into the company's bank
> accounts. The rest of the money will be split up among Google's top
> executives and early investors who plan to sell stock in an IPO
> carrying a target price of $108 to $135 per share.
> In Wednesday's filing, Google said it planned to complete the IPO "as
> soon as practicable," but didn't elaborate. Federal securities law
> prohibits Google from making public statements about the IPO beyond the
> information contained it SEC filings. The company's latest filing
> indicated the recission offer will expire sometime next month.
> Google is currently letting prospective bidders register for an
> upcoming auction of 24.6 million IPO shares at www.ipo.google.com.
> Once the registration period closes -- something that could happen
> later this week -- qualified investors can bid to buy a minimum of five
> shares through one of 28 underwriters participating in the IPO. If the
> auction is completed in a few days, Google's shares could begin trading
> on the Nasdaq Stock Market as early as next week.
> A successful IPO might make the recission offer a moot point.
> Wednesday's filing said the stockholders that reject or don't respond
> to the recission offer will have their shares and options automatically
> registered under federal securities law after the IPO is completed. The
> shares then would become tradable after the recission offer expires
> next month.
> The offer applies to 1,105 current and former employees, as well as
> company consultants, who own the affected common stock. The options,
> carrying exercise prices ranging from 30 cents to $80 per share, are
> held by 301 people.
> End of story
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