Benchmarking: Gene One

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Benchmarking: Gene One

Introduction

Gene One made a name for itself in the biotech industry with its breakthrough gene technology that eradicated disease in tomatoes and potatoes. It was a benefit to farmers who no longer need the use of pesticides and consumers that like organic produce. This successful discovery helped Gene One grow to a $400 million company in a short span of eight years.

Gene One hopes to capitalize on the growing interest in biotechnology as the stock prices on Wall Street continue to rise. The CEO and the Board at Gene One believe that becoming a public entity will help the company keep up with growing demand and realize their target annual growth of 40 %. Gene One has a strong leadership team to begin with but none of the members are familiar with the IPO process.

As the team continued to do its research on the IPO process, they realized that the Board isn’t aligned with the Securities Exchange Commission’s Sarbanes-Oxley Act requirements. Financial statements and internal controls are part of the SOX compliance as well. Some of the Board members are concerned that the current leadership team might not have the qualifications to pull off an IPO transformation. Going public isn’t cheap and Gene One needs capital for new development, marketing and advertising. It also needs to increase interest in the stock by finding multiple firms to make the initial offering. The stock price has to be right to ensure a return on investment for initial investors.

Build-A-Bear Workshop

Issue

From the beginning Build-A-Bear’s longterm plans were to become a public company. Prior to the IPO process the company had seen store sales drop as much as 16 % over three years. The executives knew something had to be done to get sales up in order for the company to be well-positioned for its planned $125 million initial public offering. (Jackson, 2004) To ensure the success of its IPO, Build-A-Bear made efforts to establish relationships with multiple investment banking firms. Stock pricing was also an issue. A main concern that the company had was being in compliance with the Sarbanes-Oxley Act as well. Staff changes had to be made prior to going public to help the process along. (Thomson Financial, 2006)

Response

IR Director Molly Salky stated, “From the founding of BBW in 1997, the long term plan was to become a public company; therefore, from day one the company structured and grew its infrastructure with that goal in mind.

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