SHARES in Google jumped to a healthy 18 per cent premium on their first day of dealing yesterday — but not before the internet search engine suffered one last humiliation on its tortuous road to a stock market listing.

Nasdaq officials were forced to scratch a trade that appeared to show Google’s shares making their debut at $136, a 65 per cent premium to the offer price, after a dealer had “jumped the gun”.

Minutes later, dealing officially started at $100 — handing investors who participated in the controversial auction an immediate profit of $15 a share.

A spokeswoman for Nasdaq admitted that a broker had prematurely dealt in the stock during the quote-only period: “It was an error — the stock was not open for trading.”

Larry Page and Sergey Brin, Google’s founders, celebrated the stock’s first day of trading by ringing the opening bell at the Nasdaq market, where the shares will trade under the ticker symbol GOOG.

Google shares closed at $100.34, a rise of $15.34, as investors who had shied away from the auction process piled into the stock, reassured by its healthy debut.

Barry Randall, a technology fund manager at US Bancorp Asset Management, said: “It’s better to buy something at $97 (or higher), sure that it’s going up, than at $85 not sure where it’s going. People will pay for certainty.”

Mr Randall, who bid for Google at $96, received three quarters of his allocation. “We have been fortunate so far, but it’s still early days,” he said.

“They could have priced higher but they wanted the pop,” said Francis Gaskins, president of, IPOdesktop.com, which provides independent IPO research.

The price was determined by institutional investors who were not prepared to overpay for a company with young, untested management, who had made several mistakes en route to the stock sale.

In the end, Google was priced on a multiple of 73 times estimated earnings, a discount to Yahoo!, its arch rival, which trades on a price-earnings multiple of 86.

Industry insiders said that there was a sense that Google’s founders had proved themselves immature by granting an interview to Playboy magazine that was published last Friday. The interview may put Google in breach of securities laws banning companies from pushing their shares during a float process.The US Securities and Exchange Commission (SEC) has asked for more information about the interview. If it decides that the pair contravened its rules, Google will be forced into a costly repurchase of all its shares.

This week William Donaldson, chairman of the SEC, told a public meeting that it was reviewing the rules. “I think we need to take a good, hard look at it,” he said.

Google has called the interview a “risk factor” but denied that it breached securities laws. It said it would go ahead with its auction and leave itself liable to buy back the shares if it was found to have broken any rules.

The previous week Google admitted that it failed to disclose stock allocation to employees during the past three years and said that it could have broken SEC rules and securities laws in 18 states.

THE TWO CONTENDERS

GOOGLE
Founded: 1998
Major shareholders: Larry Page, 31: $4.12 billion Sergey Brin, 30: $4.12 billion
Market value: $26 billion

YAHOO! Founded: 1994
Major shareholders: Jerry Yang, 35: $1.4 billion David Filo, 37: $1.6 billion
Market value: $38 billion