The suspense behind Google’s widely publicized IPO finally ended Wednesday night. The world’s top search engine priced 19.6 million shares at $85 a share, the low end of its reduced $85-$95 range. Earlier on Wednesday, Google had slashed the size of its offering by more than -40% to $1.8 billion. The company originally planned to issue 24.6 million shares at $108-$135 apiece, which amounted to a proposed offering as high as $3.3 billion. The final $85 offer price values the “unconventional” Internet-based company at just under $25 billion or roughly 23x its annualized operating cash flow (operating income plus depreciation, amortization and stock-based compensation). That's a noticeable discount to its number one competitor Yahoo!, which is currently valued at $41 billion or more than 40x operating cash flow. Both Google and Yahoo! are on track to generate roughly $1 billion in cash flow in 2004. Barring any more unforeseen “hiccups”, shares of Google should open for trading on Thursday on the Nasdaq under the symbol “GOOG”.
