Executives Cash In
By ANN GRIMES and KEVIN J. DELANEY
Staff Reporters of THE WALL STREET JOURNAL
November 22, 2004; Page C4
Shares of Web-search titan Google Inc. have nearly doubled since its August initial public offering of stock. And now Google’s biggest backers are seriously cashing in.
Venture-capital firm Kleiner Perkins Caufield & Byers, which invested less than $15 million in Google in 1999, this past Tuesday handed out 5.4 million Google shares — valued at $932 million at Tuesday’s close — to investors in one of its funds, according to people familiar with the matter.
Then, on Friday, Google’s co-founders and chief executive disclosed plans to sell a total of 16.6 million shares, valued at $2.8 billion, over the next 18 months. On Thursday, two vice presidents reported selling a combined 55,000 shares, for roughly $9.5 million.
Ironically, both the venture firm and the Google executives now are benefiting from the wave of negative publicity that forced Google to scale back its IPO in August. In the days leading up to the offering, Kleiner abandoned plans to sell shares in the IPO. Google co-founders Larry Page and Sergey Brin, as well as CEO Eric Schmidt, all reduced the number of shares they planned to sell.
Now, those shares are valued at nearly twice the $85 for which Google sold shares during the IPO. In 4 p.m. Nasdaq Stock Market composite trading Friday, Google shares rose $1.86, or 1.1%, to $169.40.
Kleiner distributed shares to roughly 200 investors on Tuesday, the day that IPO-related restrictions expired on some of its Google holdings. Kleiner passed the shares along to approximately 20 institutions and scores of wealthy individuals who invested in its Fund IX-A, the people familiar with the matter said; those investors were then free to sell their Google shares.
Kleiner disclosed changes to its Google holdings in a Friday filing with U.S. federal regulators, which showed that the Menlo Park, Calif., venture firm had distributed at least 5.8 million of the 21 million Google shares it owned from the IPO, some of it to investors in its other funds. Spokesmen for Kleiner and Google, Mountain View, Calif., declined to comment.
In all, post-IPO sales restrictions, or “lock-ups,” were lifted Tuesday on 39 million Google shares held by insiders and pre-IPO investors. That more than doubled the shares available for trading in the stock market. Over the next three months, lock-ups on an additional 227 million Google shares will expire, freeing those for sale. The additional supply, and selling by Google insiders, could pressure the share price.
Under the stock-trading plans disclosed Friday, Messrs. Brin and Page each plans to sell 7.2 million shares, or roughly 19% of their holdings. Mr. Schmidt plans to sell about 2.2 million shares, about 15% of his holdings.
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