Google surges 18% on debut

Shares in Google, the leading internet search engine, surged on their debut on the Nasdaq in New York yesterday. After the company slashed the opening price late on Wednesday to $85 per share, the stock rose 15 per cent in the first minutes to $97 per share and closed at $100.25 ­ a jump of 18 per cent.

Shares in Google, the leading internet search engine, surged on their debut on the Nasdaq in New York yesterday. After the company slashed the opening price late on Wednesday to $85 per share, the stock rose 15 per cent in the first minutes to $97 per share and closed at $100.25 ­ a jump of 18 per cent.

Sergey Brin and Larry Page, the founders, oversaw the debut of the company's shares as a culmination of their sometimes bumpy journey towards a public offering. Five million trades in the new stock were made in the first two minutes of it being listed. In all, just over 15 million shares were traded.

The opening price of $85, set after an unusual Dutch auction, gave Google a market capitalisation of $23.1bn (£12.6bn), making it more valuable than Amazon.com, with a capitalisation of $16bn, and Lucent Technologies, at $13.5bn. It was just shy of the $23.7bn capitalisation of General Motors.

There was considerable confusion in the late morning in New York as the Nasdaq boards seemed to indicate that trading in the shares had started and the price had popped up by 65 per cent. Quickly, however, officials said the change was a mistake and that trading had, in fact, not officially begun. They said that two trades had gone through erroneously before the official launch of the listing.

Analysts agreed that Google probably had been right to set the opening price at the lower end of its expectations range. It had been hoping for a price of between $108 and $135. The company also scaled back the numbers of shares to be sold. "When you finally cut through the hype, economic rationality wins out," said Bob Clarkson, a securities lawyer with the California-based Jones Day law firm who did underwriting work for many IPOs, including for Yahoo! "Bidders who wanted to buy the stock have done a reasonably hard-nosed analysis and they say they like $85 better than $108 or $120."

What was certain was that the IPO will make Mr Brin and Mr Page billionaires, at least on paper. Both men were expecting to hold more than $3bn in shares in their company. The IPO, meanwhile, raised $1.67bn.

The delay in the authorisation from the SEC earlier this week added to the drama of the flotation. There was speculation that the regulators were unhappy that the founders had spoken too freely during a pre-IPO interview with Playboy magazine.