Fidelity Really Loves Google

Updated from 3:17 p.m. EDT

Fidelity has gone ga-ga over Google (GOOG).

The Boston-based mutual fund giant owned 5.2 million shares of the search engine's Class A common stock as of Aug. 31, according to a Securities and Exchange Commission filing that Fidelity made Friday.

That amounts to a whopping 26.6% of the stock that Google and insider shareholders sold when Google completed its initial public offering of stock last month.

Fidelity didn't say how much it paid for Google's shares, but at Friday afternoon's price of $105.33 -- the company went public at $85 per share -- Fidelity's stake is worth $549 million.

Within Fidelity's family of mutual funds, 1.8 million shares, or $192 million worth, is held by (FDGRX)Fidelity Growth Company Fund, according to the filing.

While Fidelity holds a major proportion of Google's float, or freely tradeable stock, its equity stake and voting power in the search engine operator are significantly smaller.

Google has a total of 271 million shares outstanding, 238 million of which are supervoting Class B shares held mostly by company insiders, including co-founders Sergey Brin and Larry Page. Fidelity's 5.2 million shares amount to 15.5% of Google's 33.6 million Class A shares, and less than 2% of Google's total share count.

Given that Class B shares have 10 votes apiece, compared to one vote for each Class A share, the voting power of Fidelity's stake is minuscule.

"Fidelity has got a great technology research department -- probably one of the best in the country," says John Bonnanzio, group editor at Fidelity Insight, an independent newsletter focusing on Fidelity funds. "If they've taken an interest in this stock, frankly, it says a lot about Google."

As for the shares held by the Fidelity Growth Company Fund, "that would be an entirely appropriate place for them to go," says Bonnanzio. Fund manager Steven Wymer, says Bonnanzio, is a committed technology investor with one-third of the fund invested in that area. And with about $22 billion in assets in the fund, says Bonnanzio, "in order to have a meaningful position in Google, he needs to buy a lot."

At the time of publication, Mannes had no positions in stocks mentioned other than Google, which he was long for the purpose of reporting on the auction process.

TheStreet.com has waived the provision of its Investment Policy with respect to Mannes' ownership of the stock solely for the purpose of writing stories on Google's IPO. Mannes has agreed to sell his shares as soon as possible following his brokerage firm's 30-day "no-flipping" window for initial public offerings. As the situation warrants, he will be reimbursed by TheStreet.com for any losses, or donate any gains to a charity to be named later.

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