Google Shares Peak After AOL Announcement, Fall in After Hours Trading
Google shares took a roller coaster ride today as American optimism in the search engine advertising & information company peaked with finalized deals with AOL and Verizon.
Shares of Google GOOG reached $399 on Wednesday and then dropped in after hours trading by $14 after Google announced that they will be selling 5,300,000 shares of its Class A common stock, valued at approximately $2 Billion.
The issuing of the new shares in GOOG will partially meet the anticipated needs of index funds to purchase Google Class A common stock when Google is added to the S&P 500 Index at the close of trading on March 31, 2006.
From Google:
Proceeds from the offering will be used for general corporate purposes, including working capital and capital expenditures, and possible acquisitions of complementary businesses, technologies or other assets. Goldman, Sachs & Co. will act as the sole underwriter for the offering.
Google, which according to ComScore now holds a 42.3% share of the US search engine market – leading competition like Yahoo, MSN and Ask.com, came to terms with AOL yesterday, finalizing the acqusition of 5% of AOL.
From the Google AOL Entry into a Material Definitive Agreement Form Filing (thanks Barry):
The Letter Agreement sets forth the general terms upon which Google would, in exchange for $1 billion in cash, acquire a 5% equity interest in AOL through an investment in a wholly owned subsidiary of Time Warner that will own all of the outstanding equity interests in AOL. On March 24, 2006, the parties signed definitive agreements governing this $1 billion investment in AOL and Google expects that the investment will close in the second quarter of 2006.
