Investors who had winning bids for more than a handful of shares were allocated 74.2% of the shares they had sought to purchase, TheStreet.com has learned. If that's true across the board, it suggests that Google priced its offering well below the level that bidding would have supported, helping to feed the stock's 18% surge Thursday
The 74.2% allocation suggests that the search engine company, which along with early shareholders sold 19.6 million shares in its initial public offering of stock, received enough bids priced at $85 or above to sell as many as 26.4 million shares.
That excess demand helps explain why Google's shares rose Thursday: For every 742 shares that the company and insiders sold in the IPO, there was pre-existing demand for an additional 258.
The allocation also indicates that Google could have priced its deal higher than the $85 per share price it set in the IPO.
In theory, after collecting bids from different investors -- each for a specific number of shares -- Google could have set a stock price high enough so that only 19.6 million bids would have been accepted, enabling winning bidders to receive 100% of the shares for which they had bid. That highest possible price is known as the "clearing price."
But Google, after having received a healthy amount of criticism over the way it conducted its IPO, evidently decided not to squeeze every last dollar out of Wall Street that it might have been able to.