Mercury News: Bay Area news, technology, jobs, cars & real estate: "Google IPO translates into multiple billions

EMPLOYEES GET SHARE, MUST WAIT TO CASH IN

By Mark Schwanhausser

Mercury News


The 1,900 employees of Google could be forgiven for getting giddy over the company's plans to sell its stock to the public for the first time. Some of them are going to get very, very rich -- at least on paper.
Even by conservative estimates, a Mercury News analysis shows the largest initial public stock offering in Silicon Valley history will create $11 billion in paper profits for the Mountain View search company's two founders, some investors and business partners and its employees.
The $11 billion estimate assumes the stock hits the market at $40 a share.
But it could be more. Way, way more.
If the stock sells for $80 -- not a stretch, given that some are projecting even higher prices -- the first-day paper profits could double to an estimated $22 billion.
``It's not just a billion, it's multiple billions,'' said Steve Cochrane, senior economist for Economy.com. ``Psychologically, that's phenomenal.''
Google's IPO stands apart from some of the most famous IPOs in valley history. For starters, it will raise a record $2.7 billion for the company, topping the previous high of Agilent's $2.2 billion.
And the payoffs for Google's founders will be stunning compared with other celebrated IPOs. Netscape Communications co-founder Jim Clark's stake was worth $272 million after the first day of trading, and eBay founder Pierre Omidyar's stake was worth $721 million. Google founders Sergey Brin and Larry Brin will become overnight billionaires.
Google hasn't set a date yet for its IPO, but observers say it's likely to come in"