Does Google Need to Raise Capital? (GOOG)

The headlines throughout the day on internet stocks may read “Google Raising Cash” after its automatic shelf registration.  Google Inc. (NASDAQ: GOOG) did file an automatic shelf registration statement this morning with the SEC and no terms are even indicated.

The filing does allow Google to raise capital if it chooses, or it can allow for more insider sales if it chooses.  This automatic shelf registration was for any combination of Debt, Preferred shares, Common Stock, and/or Warrants.  With this being an automatic shelf registration statement, no dollar amount is specified because this sort of filing just allows the company to raise capital at any point in the future.

As far as the use of proceeds, Google only noted, “Unless the applicable prospectus supplement indicates otherwise, we intend to use net proceeds from the sale of the securities offered hereby for general corporate purposes, including to refinance or to repay outstanding indebtedness if so specified in the applicable prospectus supplement. We may temporarily invest funds that are not immediately needed for these purposes in short-term marketable securities… Unless the applicable prospectus supplement indicates otherwise, we will not receive any proceeds from the sale of securities by selling security holders.”

With the use of proceeds stating this, we do not expect a huge offering where Google will raise acquisition capital.  The king of online search has more than enough capital as is.  What it would take for Google to raise more capital is a monster acquisition.  At the moment, that does not seem to be in the cards and it would fly against the company’s acquisition history.

The full filing is here.

Update at 8:47 AM EST: Maybe S-3ASR forms usually do not infer immediate securities sales.  Now there are reports that Google is preparing a $3 billion debt deal for general corporate purposes, including the repayment of commecial paper.

JON C. OGG