Initial Public Offering
S/F/101. Initial Public Offering - IPO
The paper examines the practice of Initial Public Offering (IPO) reviewing IPO requirements in the UK, the types of IPO, etc. The issues of setting IPO prices are addressed discussing examples of shares' under pricing.
P/F/438. Role of venture capitalists in IPO marketThe paper examines the issues of venture capital investments discussing the role of venture capitalists in affecting IPO (initial public offering) pricing, and reviewing the hypothesis on the correlation between the presence of venture capitalists in the IPO market and a reduction of information asymmetry.
P/F/426.Review of theories on initial public offeringThe paper examines the process of initial public offering (IPO) in a firm's life cycle reviewing literature on the concepts of under-pricing, information asymmetry, retained equity, venture capital equity, underwriting, auditor reputation, etc. Criticism of the signalling theory is provided.
C/E/110. FDI in emerging economies: the case of EECThe paper discusses the importance of inbound FDI for emerging economies. Among the considered benefits are economic growth, the growth of internal market, technological sipll -overs and access to cheap managerial know-how. The paper also considers the motivational forces that push and pull investors to stream their capitals into particular destinations and business areas.
S/F/36. IPO valuation and analysis This work presents classical analysis of the Initial Public Offering (IPO). First of all, the general financial position of the company and the quality of management are scrutinized. This is an important step in the analysis as it allows approaching the valuation step with all necessary adjustments made beforehand. Then the valuation process itself is conducted. The author uses post-IPO cash-flow analysis in order to allow for substantial reduction of debt due to the IPO. CAPM and WACC concepts are utilized to obtain the value of the company. However, this work is not only useful for IPO valuation. The author makes comprehensive analysis of benefits and disadvantages of the IPO. The role of the underwriter and qualities it has to possess are also discussed. Since there may exist the phenomenon of short-run overperformance and long-run underperformance, the analysis of stock market returns is accomplished. Finally, the appropriateness of different stock exchanges for different types of company is discussed. The paper will be useful for students doing comprehensive case-study of the IPO.
Emerging Markets
P/E/504. Emerging markets of China and IndiaThe paper examines the emerging markets of China and India using PEST analysis and the country risk assessment model, and comparing the features of both markets.
Eckbo and Masulis (1992) open their paper by explaining the decline in rights issues and the surge in firm commitments. To show this Eckbo and Masulis use a sample of 1,249 equity offers between 1963-1981.
This case explores the operating exposure of Jaguar PLC in 1984, just as the government is about to relinquish control and take the company public via an IPO. The primary concern of the CFO is that Jaguar sells over 50% of its cars in the US, while its production costs and factories are U.K.-based. This currency mismatch creates operating exposure for the firm that needs to be hedged.
Ross, S.A., Westerfield, R.W., Jaffe, J.F., & Roberts, G.S (2001) Corporate Finance. 3 th ed.Toronto, McGraw-Hill Ryerson.
...ed not only raising the short-term capital requirements, but also maintaining access to future capital raising and providing positive returns to the crewmembers and other s involved in direct IPO share purchases.
In particular, startups conform to a set of formalized, ritualistic practices in order to obtain venture capital (VC) funding during the “seed” phase. Almost paradoxically, new companies are regarded as a kernel of innovation and invention in the economy and yet they seem to emulate each others’ routines in the pursuit of early investment, decoupled from the actual products or services they plan to sell to the
launch the stock price of this company, and incentivize new investors to lend shares for new capital.
You must have something to trade . . . Stock. Stock is a form of a security which is an investment that one makes where the investor is completely dependent on the efforts of another person. There are many benefits to going forward with an IPO. Transitioning from a closely held corporation to a publicly traded corporation can allow the early investors to capitalize financially on their investment. An IPO may also inject much needed capital into the corporation. CB at 800. The sale of securities is regulated by the Securities Exchange Commission (SEC). The SEC created specific laws with the 1933 Act in order to protect investors from fraud, while the 1934 Act provided a private cause of action. CB at 729. For a corporation to sell its stock shares publicly, it must be registered or have an exemption from registration. In registering, the corporation must file a statement providing corporate details concerning its financials and much more information that potential investors would want to know.. CB at
One of the most prominent explanation and also with the most empirical support is that IPO underpricing occurs due to the presence of asymmetric information between certain parties in an IPO transaction (explaining the short and long term IPO anomalies in US by RD). The issuing firm, the bank underwriting and marketing the deal, and the investors buying the stock are the key parties to an IPO transaction (Literature 2 pg13). There are two asymmetric models: Winner’s Curse & Principal-Agent Theory and Costly Monitoring.
This transformation process begins with an Initial Public Offering (IPO), which in most cases is a very difficult and intensive process (Phung, 2006b). An IPO is a formal, regulatory procedure that involves extensive documentation and is followed by a process of changes a company must go through in order to attain public status. The three phases include a pre-IPO transformation phase, an IPO transaction phase and a post-IPO transaction phase (Phung, 2006b). Running a publically-traded company is a completely different playing field which requires a company to restructure their management practices, organizational procedures and corporate governance (Clarkson, 770). Above all, shareholders must aim to maximize the company’s value by enhancing its growth strategy and projected profits in order to persuade investors to trade purchase shares. Completion of the pre-transformational phase will normally take about two years (Phung,
When retained earnings and the debt for funding is lacking, then an IPO becomes one of the most probable ways to have continued growth for the business. This strategy is used to help maximize the value of the company. Historically an IPO has been an offer to a large number of retail and institutional investors that become shareholders of a company. With a huge magnitude of a large number of investors with their confidence with the liquidity of the investment in a public entity will assure current owners of maximum share valuation.
The timing of an IPO is crucial. Within the next twelve months, XYZ INC. plans to open its doors to go pu...
The case study is about an interview, conducted to four venture capitalists from four of the most prominent VC Silicon Valley firms, Kleiner Perkins Caufield & Byers (KPCB), Menlo Ventures, Trinity Ventures and Alta Partners. These firms invest both in seed as well as in later-stage companies, which operate mostly in the information technology sector. However, each VC has developed different sector portfolio depending on the expertise of the venture capitalists, the partner network and other factors. Professor Mike Roberts and Lauren Barley a senior research associate, both from Harvard Business School, have made a series of seven questions to their interviewees to understand how they evaluate potential venture opportunities and what they look at in order to decide if they will fund them and in which way. The questions were dealing with how VC’s evaluate potential venture opportunities, how they conduct due diligence, what process id followed for the decision making, what financial analyses is performed, the role of risk in the evaluation and how they think of potential exit routes. These questions were asked individually and revealed several similarities as well as differences in the strategy and the criteria that are used for the evaluation.
The financial position of a company offers great insight on the performance of the company on short-term and long-term basis. This work argues that Facebook Inc. is a company with a subjective investment portfolio. The purpose of this paper is to use ratio analysis to determine the position of the Facebook as an investment destination. The first section explores two ratios and their implications to a potential investor. The second part evaluates whether Facebook is bankrupt. The succeeding section offers advice to potential investors. The work culminates by highlighting key points and making necessary recommendations.
In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a). The two nations, because of their similarities in geopolitical, economic and demographic aspects, are often compared with each other. To determine which one is more attractive for businesses to expand to, this essay will examine the business environment of both countries from the following perspectives: political/legal, economic, socio-cultural and technological.
* The amount of capital to be raised and the number of shares to be