Google IPO could puzzle investors

NEW YORK: Not only will potential Google Inc. investors have to figure out how much they want to bid to buy shares of the Web search giant in its initial public offering, they are also going to have to figure out which broker to use to place those orders.

In an amended filing with the U.S. Securities and Exchange Commission on Monday, Google added fresh details on its upcoming auction-based IPO that show the extent to which its 28 underwriters vary in how they will collect bids from prospective investors.

Those who want to buy shares of Google will need to open an account with one of the investment firms, and they will need to outline the number of shares they want to buy and at what price.

But the underwriters are not following a uniform process in letting investors place those bids to buy shares.

For instance, Google has set a minimum bid of at least five shares. But investors using HARRISdirect will need to submit a bid for at least 100 shares.

Google also said that most of its underwriters will permit potential investors to submit an unlimited number of bids.

But UBS Securities, Charles Schwab & Co. and Fidelity Capital Markets will permit bidders to submit only one bid per account; HARRISdirect will permit bidders to submit up to three bids per account; and Ameritrade will permit bidders to submit up to 30 bids per account.

E*TRADE Securities will let bidders to submit up to five bids per account, but they cannot submit bids for more than a total of 10,000 shares per account.

In previous filings, Google estimated its shares would price in the range of $108 to $135 each. In the amended filing, Google boosted the number of shares it plans to sell to 25.7 million from 24.6 million.

But Google also reminds investors to not get overzealous in their bidding.

"Do not submit bids that add up to more than the amount of money you want to invest in the IPO," Google warns in the filing. "This is a very important point."

For instance, if an investor places two bids, one for 8 shares at $125 and another for 7 shares at $132.85, and the IPO price is set at $124.50, the underwriters would accept both of the bids and investor would be on the hook to purchase 15 shares for $1,867.50.

Google also reminds investors they may not even be able to bid on the IPO even if they want to.

"Due to each underwriter's requirements for new customer accounts, you may not be able to open an account with a particular underwriter. Even if you are a customer of one of our underwriters, and even if you have obtained a bidder ID, you may not be permitted to submit a bid if the underwriter through which, you wish to submit your bid determines that you do not meet such underwriter's suitability standards," the filing states.

Google tells potential investors to "discuss any questions regarding your bid" with the investment firm they choose to use.