Google (GOOG, as if you didn't know the ticker by heart) announced after the trading day ended yesterday that they're going to be issuing yet another stock offering to raise a couple billion dollars in cash. Certainly not the end of the world, though I question why Google needs the money today, with the amount of cash their business already spits out.
They used the regular boilerplate language in the release to say the money will be used for general corporate purposes, possible acquisitions, etc... but the fun part was in the beginning of the release, when they wrote:
This offering 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.
Oh, how can we thank you, Google! What were those poor index funds to do before these extra GOOG shares became available -- how bereft they'd be without the easy availability of Google shares for purchase!
Oh, wait ... Google shares are available for purchase, in plenty of quantity, every day. In fact, about three times as many shares as they're now planning to offer change hands on the NASDAQ every single day. Index funds would have had no trouble buying enough shares to meet their index targets ... it's just that they'd have to pay a little more for them because of increased demand and constant supply.
I'm not particularly upset -- it's fine that Google needs money to make acquisitions because they're terrified of Microsoft's massive cash hoard. I just hope they spend wisely, as I believe they've done in the past (yes, I even think the AOL deal made good sense for them, and I'm very pleased with their smaller acquisitions like Writely).
But please, don't sell us that line of hooey. They're trying to time the market by issuing this offering after a nice runup in the shares, so just say so... Google has clearly had no interest in cozying up to Wall Street since they went public, it's certainly not believable that they're trying to do the index fund managers a lucrative favor today.
At least we get a little comic relief to accompany the 3% drop in share price after hours. In my heart I actually blame the little after hours drop on the fact that I briefly considered paring a small part of my GOOG holdings today and decided instead to hold on, but perhaps I'm overstating my own influence.