The general buying public will probably have to wait another month or longer before being able to buy shares of stock from the Scottsdale-based GoDaddy.com domain registry company.
Meanwhile, the process of negotiating a stock price and finding customers for the initial public offering for the privately held company is being handled by underwriters, Merrill Lynch & Co. and Lehman Brothers.
Merrill Lynch & Co., Lehman Brothers and GoDaddy.com declined to discuss the IPO offering, saying they were prohibited by the U.S. Securities and Exchange Commission’s “Quiet Period” regulations.
IPOs, generally, are first offered by the underwriter to large buyers such as institutions or wealthy investors, according to the SEC.
The underwriter usually first discusses the potential price with the seller and then meets with potential buyers during the so-called “Road Show,” or selling period, to determine a price for wealthy buyers who can purchase directly from the underwriter.
The stock is then approved by the SEC and placed for sale to the public on the market, in this case Nasdaq.
However, the selling price on Nasdaq could be different than the first, initial offering, according to the SEC.
“You may have found that there can be a large difference between the price of an initial public offering and the price when the IPO shares start trading in the secondary market,” the SEC information service said.
The SEC offers this advice to potential buyers:
“Some firms impose restrictions on investors who ‘flip’ or sell their IPO shares soon after the first day of trading to make a quick profit. If you flip your IPO shares, your firm may refuse to sell you other IPOs altogether or prevent you from buying an IPO for several months.”
The SEC suggests that prospective buyers can learn more about the difficulty of buying shares in an IPO and the differences between the IPO price and the price when the IPO shares start trading on the market on the particular underwriters’ Web sites.
Bob Parsons, founder and president of GoDaddy.com, filed a request with the SEC May 12 asking it approve its public listing on Nasdaq under the stock symbol “DADY.” The request was made by Go Daddy Group, the corporate name.
The company reported cash assets totaling $13.6 million in 2005. It told the SEC is planned to use funds from the sale of its shares to pay off a $7 million loan it obtained to buy a building last year and to expand its customer service and research and development departments.
The public offering is believed aimed at drawing additional revenue and, if successful, to expand the company’s business nationally and internationally. There were an estimated 1.2 billion Internet users internationally in 2005, according to the company’s SEC filing.
Despite GoDaddy.com’s growth, and the potential for expansion, Parsons' reported his company has had a net financial loss every year since it was started in 1997. The biggest loss was $11.6 million in 2005, the SEC report said.
Its financial history and other submitted data is available at
WHAT IT IS: A domain registrar with headquarters at 14455 N. Hayden Road, Scottsdale
WHEN IT BEGAN: Started in 1997 by Bob Parsons, chief executive officer and a Vietnam War veteran who previously opened Parsons Technology in Iowa, which was purchased by Intuit in 1996