On August 19, 2004, Google Inc. made history. The company launched its first sale of stock to the public. This event is called an Initial Public Offering. Google chose a special method for this sale. They used a “Dutch Auction.” This method was unusual for big technology companies at the time.
(August 19, 2004: Google’s IPO and the “Dutch Auction”)
Most big IPOs rely on big investment banks. These banks set the share price. They also decide who gets to buy shares first. Google wanted a different approach. The Dutch Auction aimed to be fairer. It aimed to let more people participate. Investors could place bids. They stated how many shares they wanted. They stated the price they were willing to pay.
Google collected all these bids. Then they set the final price. This price was the highest level where all shares could be sold. People who bid at or above this price got shares. Everyone paid the same final price. This price was $85 per share. Google sold 19.6 million shares. This raised $1.67 billion for the company. Google’s total value reached about $23 billion.
(August 19, 2004: Google’s IPO and the “Dutch Auction”)
Trading started that morning on the NASDAQ exchange. The stock opened under the ticker “GOOG.” Activity was strong. The share price climbed during the day. It closed at $100.34. This gave the company a good start. The founders, Larry Page and Sergey Brin, wrote a letter. This letter was part of the IPO documents. They called it an “Owner’s Manual.” They said Google was not a conventional company. They did not plan to become one. The auction method reflected this attitude. It aimed to reduce the influence of big banks. It aimed to give smaller investors a better chance. The process faced some challenges. Some investors found the auction complicated. Some Wall Street firms were less supportive. Google succeeded in its main goal. It successfully sold all its shares. It set its own price. The event marked a major step for the young internet giant. It provided funds for future growth. It also changed how people think about public stock offerings. The first day saw the stock price rise significantly. This indicated strong market confidence. Employees holding stock options saw their value increase. The company gained significant capital for expansion. The market watched Google’s debut closely. It signaled the growing power of internet businesses.