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In the spring of 2004, Google was one of the most-talked-about IPO ideas since Netscape had gone public in 1995. Bullish investors believed Google could set off a string of successful IPOs following a lull in tech-offering activity since 2000. Executives at Google faced several questions in the following months: Should Google go public? What options did Google have for taking its shares to market? Was the traditional form of book-building necessarily the best course of action? Could a sealed-bid auction (e.g., W.R. Hambrecht's OpenIPO) yield superior results?

This case explains marketing process for follow-on equity offerings, the direct and indirect costs of issue, and the long-run performance of equity issuers. Students use analysts' projections from which to estimate the intrinsic value of the company's share—including the cost savings from the VEBA and financial improvements over the next several years. It is appropriate for use in corporate finance courses covering the topics of capital raising, equity financing, capital structure, costs of financing, funding alternatives, investment banking, and valuation. It presents the classic profile on an equity issuer—a firm whose stock price has risen to new heights in recent months. Will the issue lead to additional value that creates opportunities for shareholders, or is it a sign the firm is overvalued? The case explores the thinking of a prominent investment manager who had accumulated a large stake in Goodyear and who did not see the need for Goodyear to make an equity issue at this time. The company's position was that the high stock would allow it to further strengthen its balance sheet and pursue international growth opportunities. Students are asked to decide what the investor should do with respect to the current offer—buy, sell, or hold.

Bob O'Connell, CFO of General Motors, is considering a variety of equity alternatives to fund a large shortfall over the next couple of years. His tasks are to map out a financing strategy for the long term and to choose the equity instrument to be issued immediately. Of particular interest to O'Connell is a new security called PERCS (preferred equity redemption cumulative stock).