...George Chiu Armen Odadjian Mengyang Wu FBE459: Stock-Trak End of Semester Report Our portfolio had a return of +6.97% as of November 28th compared with a +3.86% return on the S&P 500 in the same time period. We ended with a Sharpe Ratio of 4.30 and portfolio beta of 0.23. Over 136 trades, we employed various option strategies, longed and shorted equities, speculated on commodities with futures, and invested in fixed income securities. Listed below are a few highlights and in-depth analysis of the strategies that we used. Protected Put Ticker | Position | Cost | Strike | S0 | ST | Profit/Loss | MU | Long | | | 30.61 | 34.30 | +$369.00 | | Buy Put | 1.72 | 31 | 30.61 | 34.30 | -$172.00 | DVN | Long | | | 59.02 | 67.20 | +$818.00 | | Buy Put | 1.60 | 57.5 | 59.02 | 67.20 | -$160.00 | SSYS | Long | | | 116.63 | 102.42 | -$1,421.00 | | Buy Put | 6.70 | 115 | 116.63 | 102.42 | +588.00 | *where S0= price at position open and ST=price at position close On October 22, we entered into three protect put strategies for Micro Technology (semiconductor maker), Devon Energy Corp. (energy company), and Stratasys, Ltd. (3-D printer maker). Our team believed that each company would outperform their peers in their perspective industries. Each company, however, operates in volatile industries. The semiconductor industry suffers from cyclical demand and producers often see margins slashed due to constant price wars. The stock prices of energy companies often fluctuate with...
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...IPO, is to “connect the world digitally with Facebook” and increase its total membership (Rusli, 2014). Mr. Zuckerberg kept his primary mission of Facebook and cared less about the revenue. His strategy of Facebook at this point was to attract as many users as he would without placing more importance on how to make a lot of money. Facebook’s strategy before IPO is not a winning strategy. First of all, Facebook’s strategy at this point did not match well to the company’s best market opportunity of its initial public offering. Since Facebook wanted to go public, it needed a good performance to attract its potential investors and shareholders. The ability of gaining revenue is an important symbol and sign that potential investors will look for before deciding whether to invest. However, Mr. Zuckerberg’s primary mission of Facebook showed that “Facebook was not originally created to be a company” (Rusli, 2014), which would be harmful for the company to attract more potential investors. Therefore, Facebook’s strategy before IPO did not pass the fit test since this strategy didn't suit the company’s current situation at that point. Secondly, Facebook’s strategy could not help the company achieve a sustainable competitive advantage since this strategy...
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...environmental groups said the cracks in the bolts indicated deterioration of the nuclear power plant's structure, operating systems, parts and components. Allowing continued operation of the aging plant would jeopardize public safety. At a recent public hearing on the matter, Tsuei Su-hsin, secretary-general of Green Citizen Action's Alliance, said the decision to resume operations was not transparent. Forecasts for slow growth in China, worries over Greece bailout take toll on markets HONG KONG--World stock markets sank Tuesday over worries about slower economic growth in China and a possible snag in the deal for Greece to get its bailout money. In early European trading, Germany's DAX was down 0.4 percent at 6,835 and the CAC-40 in France fell 0.4 percent to 3,473.81. The FTSE 100 index of leading British shares lost 0.3 percent to 5,857.35. U.S. stocks were poised to fall. Dow futures were down 0.3 percent at 12,915. Broader S&P 500 futures were down 0.4 percent at 1,358.70. Asian stock markets also slid, as mainland Chinese shares saw their biggest loss in almost a month a day after Premier Wen...
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...offering and their publicizing of their company to make many individuals rich. Because of this public knowledge, there are many insiders that are trying to take advantage of this situation by already trading stocks as if it were already public. In comparison to many other companies that, when they go public on average have between 50 and 100 investors, Facebook already has more than 1000 shareholders apart of their company. The company is supposed to be in a quiet period and not talk to investors, or try to create more hype or to overprice their stock because of the federal rules of the SEC Policy of 1933. They are urged not to jump the gun. As an example, when Google spoke to and interviewed Playboy, they had to include that interview as apart of their final filing. The concern however, is whether or not the insiders of Facebook may be limiting the IPO by pushing their value. The CEO and founder of Facebook, Mark Zuckerberg, had initially held firm to a valuation of $100 billion, but since the company is already being traded privately, the stock has risen to $44 and therefore made the company jump by $3 billion in value. Facebook may face smaller gains because they have been traded more and owned by larger investors. We do not know how these actions will affect Facebook’s IPO shares, but it will definitely be an interesting one to watch unfold by the business world, and the general population of spectating and...
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...Facebook Prospectus Project Review the Facebook Prospectus and answer the following questions. 1. How many total shares of stock are being offered by Facebook? -180,000,00 2. How many shares are new shares, and how many are existing shares being sold by current shareholders? -421,233,615 3. Describe the classes of shares, and the voting rights the shares will have. * Shares of Class A common stock are entitled to one vote per share. * Shares of Class B common stock are entitled to ten votes per share 4. Which class of stockholders will hold control of the company? -Class B 5. Does any one shareholder have control of the company? If so…who? -A dual class common stock holder 6. On which exchange will Facebook be traded? NYSE 7. At what price is the stock offered to the public? - $38.00 per share 8. What is the Underwriters Commission? * Underwriting commission is the compensation that an underwriter receives for placing a new issue with investors. It is the fee which an investment banker charges for underwriting a security issue 9. What are the net proceeds expected by Facebook. - $998 million 10. What investment banks make up the Underwriting Syndicate? * ALLEN & COMPANY LLC CITIGROUP CREDIT SUISSE * DEUTSCHE BANK SECURITIES RBC CAPITAL MARKETS * WELLS FARGOSECURITIE 11. Review the risk factors. Which 3 or 4 cause you the greatest concern? If we fail to retain existing users...
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...starts by looking into Facebook’s background and what led up to the decision of turning the company public. It gives a brief explanation on the reasoning behind the decision and outlines the company’s main aims and focuses. It then gets into a few behavioural finance theories which help to explain the reasoning and decision-making process of investors purchasing Facebook stocks. Due to the very high anticipation of Facebook’s IPO and the company’s overall popularity, many investors may be over-confident or overestimate Facebook’s stock performance in the future. This may be damaging towards investors. However it is then concluded, that even though many investors decisions to purchase Facebook stocks may not be completely rational, they may still turn out to be beneficial for the investor. Introduction An IPO or Initial Public Offering, which can also be called Stock Market Launch, can be defined as a private company’s first sale of stock to the public. It is through this process that a private company is transformed into a public company. One of the most common reasons for going public is to raise expansion capital, which is to be used for the company’s growth. Behavioural Finance can be defined as a field of finance, which seeks to provide explanations as to why financial decisions are made. This is done through the use of cognitive and behavioural psychology based theories. This report is going to analyse any behavioural finance phenomena behind Facebook’s Initial Public Offering...
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...delivered ads to Facebooks users. Users uploaded an incredible wealth of information to Facebook, including their authentic identities, interests, and social connections, allowing advertisers to target their ads to an unprecedented degree. Further, all user uploaded information became the property of Facebook, granting them a monopoly on the data. This hyper-focused approach contrasted with those of other major technology driven advertising firms, like Google, whose value proposition is the ability to reach a significant percentage of all consumers using the internet. Facebook’s other revenue driver, online payments, consisted of in-game purchases of virtual goods for social games. In 2011, all of this revenue was generated via Zynga games. This business relied upon consumers using Facebook as their home for socially-connected online gaming. Given that payments represented a small portion of Facebook’s revenue, and that the advertising business was at the time more developed and predictable, valuing the company as an advertising company rather than a hybrid advertising and payments company seems appropriate. The comparative advantage of Facebook relative to other social networking companies is primarily driven by network effects. From a user’s perspective, joining a social media site was worthwhile only if friends were participating. Advertisers were drawn to social media sites with large user bases as well, so the network effects were doubly reinforcing. A large,...
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...Facebook study p2 Facebook is the first largest social network on the web. Primarily focused on high school to college students and you can find friends/family members. Facebook has been gaining market share, and more significantly a supportive user base. Since their launch in February 2004 by Mark Zuckerberg Facebook is worth 141 billion with 1 billion of users. According to Floating Facebook “The value of friendship Facebook is likely to become a gargantuan company. That will bring risks as well as rewards” Feb 4th 2012, SAN FRANCISCO, started for Pre- Initial public offering (IPO) “Facebook has techies and venture capitalists been so aflutter”. In addition, the agreed settlement was for 1.2m shares which were worth $300m at Facebook's IPO in 2004. The company structure at IPO is CEO has a voting percentage of 57.9% of the board election which is simple to vote majority and rules of a controlled company. The ownership of Facebook is the Chief Executive Officer (CEO) Mark Zuckerberg and he owns 28.4% of Facebook. Facebook funding before IPO became into the photo which had millions of users, Friendster attempted to acquire the company for $10 million in mid 2004. However, Facebook turned down the offer and subsequently received $12.7 million in funding from Accel Partners. Sean Parker provided the introduction to their first investor, Peter Thiel, cofounder of PayPal and managing partner of “The Founders Fund”. Peter Thiel invested $500,000 into Facebook. In addition,...
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...Is stock market performance linked to business performance? Abstract Still in the heart of an unprecedented financial crisis, new questions came up about the working of the stock market. In the eyes of general public the stock market can seem a lot like gambling to the extent that this one was reconsidered. The stock market index seems to be valuating at random, especially since the last financial crisis. But the fact that stock market plays an important role in the health of the economy turn impossible this though from general public, which leads us to ask the following question: how the stock market is influenced? We will adopt a general approach and focus on the probable influence of business performance on stock market performance. In order to do so, we collected information and date from Standard and Poor’s source and from specialized source. Executive summary The first modern stock market, today called the New York Stock Exchange (NYSE) was established in 1792 in New York City . The purpose of the stock market is to give the opportunity to companies to open themselves up to public investment in order to raise capital. The stock market is composed of a primary market and a secondary market. The primary market is where a company sells shares for the first time or issues new ones. In the secondary market investors trade securities or assets with other investors, the cash proceeds from transactions go to the investors instead of the company. At this point...
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...Business Administration Chiang Mai University March, 2012 Facebook’s Capitalization Report by Thanassorn Boontarika Pinnarat Sathit Saowaluk Hathairat Ratanasirisap Pongpaew Suriyachot Chobpimai Sangkuan Yosdech Code Code Code Code Code Code 541532126 541532137 541532142 541532155 541532164 541532176 Report to Dr. Chaiwuth Tangsomchai Course work 702711 Financial Management) Master of Business Administration for Executive(Chiang Mai) Business Administration Chiang Mai University March, 2012 - - Index - Page Chapter I Introduction & Objective 1.1 Introduction 1.2 Objectives Chapter II Company 2.1 Facebook, Inc. Profile 2.2 The Corporate Mission 2.3 Executive Officer and director 2.4 Facebook’s Shareholder 2.5 Facebook Milestone 2.6 Facebook Business 2.7 Competition 2.8 Revenues Stream 2.9 Facebook Market Opportunities 2.10 Facebook Strategy 2.11 Summary of Risk Factor Chapter III Facebook Financial Report 3.1 Consolidated Balance Sheets 3.2 Consolidated Statement of Income 3.3 Basic Earning Per Share 3.4 Pro-forma Earning Per Share 3.5 Consolidated Statement of Cash Flow 3.6 Consolidated Statement of Stockholder’s Equity 3.7 Dividend Policy Chapter IV Facebook Initial Public Offerings(IPOs) 4.1 IPOs Advantage 4.2 Preparing to go to Public 4.3 Facebook IPOs 4.4 Facebook IPOs Underwriting Company 4.5 Facebook IPOs Counsel Company 4.6 Facebook IPOs Financial Auditor 4.7 Why Facebook go to Public? 4.8 U.S. Stock Market 4.9 Which Market Facebook Plan to Listing? 4.10 Facebook...
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...Huang 114352699 Emily Buczkowski 112344252 Rui Cao 114368911 Julian Gooch 112364922 University of Maryland, R. H. Smith Business School Summary Facebook is an emerging internet-based company which has astonishing growth in the past decade. Its substantial user base, subsequently massive database and pioneer brand image provide Facebook with the profitability base of its business. The main goal in this case is to evaluate the opportunity of investing Facebook in its IPO. Here we use both DCF valuation and Multiples valuation method to measure if Facebook is fairly priced. It turns out that both DCF valuation and Multiples valuation indicate that Facebook’s stock price is overvalued, suggesting the manager not to buy Facebook at IPO. We could also justify this decision by putting release of non-tradable stock and price trend of other recent IPOs into consideration. University of Maryland, R. H. Smith Business School Overview of problem Facebook is a leading social networking company with rapidly revenue growth, whose profit mainly come from advertisements. It planned to go public on May, 2012. Our issue in this case is to decide whether it is a good opportunity for CXT to invest on Facebook in IPO. So we need to estimate the value of a Facebook share to see if it is overvalued or undervalued. Section 1 Case Briefing 1. How does Facebook make money? What are the value drivers of its business? What is its comparative advantage relative to other social...
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...On September 12, 2013, Twitter confidentially filed for an I.P.O. with the S.E.C., but made it publicly known through its own website (Sommer, 2013). It does not seem to be a coincidence that they have timed their offering with the rise of Facebook’s stock and the overall market. Wisely, Twitter has waited to make the offering until the disaster of last year has begun to dissipate, but it is possible that it will crash and burn at the beginning just like Facebook. Twitter decided to take advantage of the confidentiality provision within the JOBS Act that allows companies to “limit transparency” by keeping company financial information private up until three weeks before the company promotes its offering. However, the only companies who can use this provision are those that have annual revenue less than $1 billion. This gives us a little insight into how well Twitter is doing financially (Sommer, 2013). The confidentiality provision in the JOBS Act was intended for entrepreneurial firms who want to avoid too much attention and “prying eyes that might deter them from going public and growing to maturity”, said Kate Mitchell, a former chairwoman of the private I.P.O. Task Force. When asked about why the limit was set at $1 billion she stated, “We did that because we wanted I.P.O.’s to succeed. Had the limit been lower, it might have given smaller companies an incentive to rush to take advantage of it too soon, before their revenues had grown and, maybe, without a business plan...
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...privately owned company makes an Initial Public Offering, it means they're moving to be publicly traded on the stock market for the first time. That means that anyone can buy stock in the company and own a portion of it. Ads By Google Online Trading Plus500®: APPL, Ebay, HP Commodities, No Fees! www.Plus500.no Bilforsikring -Sjekk pris Nemi Bilforsikring testvinner i VG. Sjekk din pris på bilforsikring her neminordvest.no/bilforsikring UK Fixed Income Aberdeen Managed UK Fixed Income Assets. Learn More. Aberdeen-Asset.NO Going public can help a company raise significant capital if a lot of people want to buy its stock. It also means that the company has to publicly disclose details about its finances, like its earnings, that it previously kept private. WHO DECIDES THE VALUE OF AN IPO? An investment bank determines how much money the company can expect to make on the stock market based on a number of factors, from the health of the economy to how popular the company's product is expected to be in the future. The initial valuation is always a bit of a gamble, since the stock has never been traded publicly before, and analysts can't look at past behavior to figure out how it should be priced. Morgan Stanley is expected to spearhead Facebook's IPO filing, with Goldman Sachs playing a supporting role, the Wall Street Journal reported Saturday. Facebook's IPO has been pegged at $5 billion. The company itself being valued between $75 billion and $100 billion, unnamed...
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...Is Skype worth $8.5 billion? An exercise in valuing young, growth companies Posted by Aswath Damodaran Wednesday, May 18, 2011 Last week, Microsoft announced that it would buy Skype for $8.5 billion. The reaction was fast, furious and very predictable. First, there was the search for reasons for the deal and technology mavens listed a few. Second, there was the reaction from investors and analysts, which was generally not very positive. Third, it was noted that Bill Gates, the face of Microsoft for so long, was strongly in favor of the deal (thus providing cover for Steve Ballmer). Ultimately, though, the discussion of the deal was lacking in one key respect: Is Skype worth $8.5 billion to Microsoft? A few of the analysts noted that the price paid was roughly ten times Skype's revenues in 2010, an undoubtedly rich price, but by itself proving nothing. After all, if you had been able to buy into Google at ten times revenues in 2003, you would be rich now. A great deal of attention was paid to whether Skype was the right company for Microsoft to buy and the strategic/synergistic fit of the two companies. It has always been my contention with acquisitions that it is not the strategic fit or synergistic stories that make the difference between a good deal and a bad one, but whether you buy a company at the right price. Put in more direct terms, buying a company that is a poor strategic fit at a low price is vastly preferable to buying a company that fits like a glove at the wrong...
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...-the relationship of the leader to the board has a tremendous impact on the organization’s ability to fulfill its mission. -they work with to create the most effective, strong, and healthy boards possible to serve the organizations that they lead. -The chapters provide a brief overview of the best practice and its relationship to board development. -Join this journey of exploring the best practices of strong and effective boards. guiding the reader from a solid starting point of development by establishing role, purpose and function of the board to knowing and communicating the organization’s mission, vision and values. -Board members intentionally and routinely engage in mutual accountability, communication, evaluations and board development while taking the necessary time to process decisions eliminating unnecessary surprises. Boards unite and resolve to work together through change and transitions for the good of the Kingdom, the advance of the Gospel, and the prosperity of the organization. -to exhibit generosity as board members and to be outstanding examples of giving regularly and sacrificially to the church, college or organizations they serve in order to establishment a culture of board development that embraces the principle of “passing it on,” by developing new board participants that will lead to a strong and healthy future for the organization. - as a board member or as leader of an organization can take your present board environment and develop it into...
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