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Priced below auction clearing price - 8/19/2004 06:17:04 AM

Google's IPO priced at the lowest end of the revised price range yesterday, and it appears that Google set the price significantly below the price determined by the auction.

While many news reports yesterday surmised that there was little demand for the Google IPO, since both the price and number of shares were reduced, could it be that Google intentionally underpriced the offering to improve the odds of a first-day bounce?

In my personal account, I bid for 170 shares but the final allocation awarded me 126 shares, or 26% fewer than I had requested. If Google had used the auction clearing price, each bidder should have received the number of shares requested. If Google reduced the IPO price below the clearing price, then more investors would receive shares, but each investor would receive only a pro rata portion of the bid quantity.

This should bode well for the first day of trading today.


$85 per share - 8/18/2004 06:33:20 PM

From: Auction Information (information@ipo.google.com)
Date: Wed, 18 Aug 2004 18:23:49 -0400 (EDT)
Subject: Google IPO - Notice of Acceptance

We are pleased to notify you that the initial public offering price for
shares of Google's Class A common stock is $85.00 per share and your
bid(s) to acquire shares at a price equal to or above the initial public
offering price was successful and is hereby accepted, effective upon the
sending of this notice. Google and the underwriters have relied upon
your bid in setting the initial public offering price, in determining
which bids are successful and in allocating you shares.

Your brokerage firm will inform you of the number of shares of Google Class
A common stock allocated to you and that you are obligated to purchase at
settlement, which is expected to occur on August 24, 2004.

-- Google email to successful bidders


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