SAN FRANCISCO - In another twist to Google Inc.'s public stock offering, the Internet search company said Monday that federal regulators have opened an informal inquiry into its failure to register millions of shares.
In a regulatory filing Monday, Google said it "understands" the inquiry was opened by the Securities and Exchange Commission. SEC spokesman John Heine declined to comment.
Google has said it neglected to register 23-million shares and 5.6-million options. They were issued from September 2001 through July 2004 primarily to employees and consultants.
To make amends, Google is offering to buy back 23.2-million shares and 5.6-million options for $25.9-million, including interest. The offer will be sent to 1,406 people, who could reject the buyback and sue the company.
The SEC's inquiry also could prove costly if it results in penalties. Moreover, several states also are asking questions about bungled stock issues, Google said.
It was not immediately clear whether the investigation will affect Google's highly anticipated IPO. Earlier Monday, the company asked the SEC to give final approval of the paperwork required for the sale, effective as of 4 p.m. today.
Google's initial stock price could be set late this afternoon, and the stock could begin trading Wednesday morning. Even with the SEC's blessing, however, the timeline could change.
Google, which has estimated that its shares will be priced between $108 and $135 each, has been accepting bids from investors since Friday as part of an unusual auction that is supposed to democratize the IPO process.
In its statement, Google said successful bids may be accepted as quickly as an hour after the SEC makes the company's registration statements effective.
