...For many companies, going public is more than just selling stock. It’s a signal to the world that the business has made it. The IPO process can be a difficult and expensive proposition, so a company that is considering going public must be well established and capable of passing tough regulatory requirements. This essay will be providing information on the IPO process, the advantages and disadvantages of the process, and how Visa Inc. managed to pull of the most profitable IPO in U.S. history. Overview An IPO, short for Initial Public Offering, occurs when a private company sells either debt or equity to the public for the first time, thus transforming into a public company. Companies usually issue their stock in the two mayor public markets, NASDAQ and the New York Stock Exchange. Companies who are going public must pass certain financial qualifications. For example, NYSE requires companies to generate 11 million in pre-tax earnings, while NASDAQ requires 10 million in pre-tax earnings. Once a company’s stock is public, any investor with sufficient cash can buy stocks and be part owner of the company. IPO Process: Underwriter Selecting the right investment bank is a crucial part of the IPO process. Known as underwriters, these investment banks look after the pricing, positioning and marketing of a company’s initial public offering. Big companies like GM or Google can pick and choose their investment partners because most banks are willing to take on the risk. Smaller...
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...IPO When a business is growing, but not as quickly as it could, the next best thing to do instead of borrowing capital is going public. A company can do so by creating an initial public offering, or IPO where they sell ownership shares of the business to the public. The IPO can open windows of opportunities for a business in terms of financial growth and public awareness. On the downside, an IPO can restructure a company’s management and everything about the company must be disclosed and viewed even by competitors. With this in mind, many companies who are deciding between whether to go public or not may have their second thoughts. I will be discussing the advantages and disadvantages that come with IPOs and the results that some companies have seen from going public. What is an IPO? The initial public offering or IPO according to CNNMoney.com is “the first time that a company’s shares are traded on a public market.” It is the process where a privately owned company issues shares of stock to the public, in other words, the company is “going public.” Small private companies have IPOs to raise capital and gain public awareness, while large, well-established companies have IPOs to become publicly traded companies. A person who is interested in a particular company can buy one of two types of shares: common or preferred stock. When a company only issues one class of stock, it is called common stock. Common stocks are generally less expensive to purchase than preferred...
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...AdKeller Graduate School of Management at DeVry College of New York Managerial Finance FIN516 Initial Public Offering By: Ayanna Teesdale Tianyi Liu Marco Palli Cafarelli Prof. Dr. Hamlet, Michael. January – February 2013 EXECUTIVE SUMMARY Condensed information of Visa Inc. is presented by revising the historical events and based on the respective 10-K Filing that this company published every year since its Initial Public Offering (IPO). First, the paper opens with a review of the company and its industry. Second, the Financial and Non-Financial facts are reported based on information stated on the Security and Exchange Commission (SEC) filings. Followed by an analysis that describes how successful was the IPO in raising capital, which continues with a narration of the happenings to the company since the IPO. Finally, the trend of Visa’s stock price since the IPO is scrutinized. THE COMPANY AND ITS INDUSTRY Visa Inc. is a company headquartered in San Francisco, California that engages the process of trading electronic payments through a network worldwide. It enables commerce through transferring data information (which has money value) among financial organizations, merchants, shoppers, businesses, and government entities via VisaNet (an exclusive asset of the company) which is a Network Information System (NIS) that is capable of offering fraud safety for consumers and guarantees payment for merchants. Visa’s payments platforms allow: credit, debit...
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...(Ordinance No. XVII of 1969), the Securities and Exchange Commission makes, after prior circulation, the following further amendments in the Securities and Exchange Commission (Public Issue) Rules, 2006, namely :⎯ In the aforesaid Rules,⎯ 1. In rule (2), for sub-rule (1) the following sub-rule (1) shall be substituted, namely :⎯ “(1) In these Rules, unless there is anything repugnant in the subject or context,⎯ (a) “associate” means any partner, employee or officer of a company or a body corporate over which the directors or subscribers to the Memorandum of Association and Articles of Association can exercise significant influence or control; ( 2445 ) g~j¨ t UvKv 6.00 2446 (b) evsjv‡`k †M‡RU, AwZwi³, gvP© 19, 2009 “banker to the issue” means any bank so named in the prospectus to collect money as subscription against security; “bidders” means the eligible institutional investors; “book-building method” means the process by which an issuer attempts to determine the price to offer its security based on demand from institutional investors; (e) “Commission” means the Securities and Exchange (c) (d) Commission (SEC) established under the wmwKDwiwUR I G·‡PÄ Kwgkb AvBb, 1993 (1993 m‡bi 15 bs AvBb); (f) “commission” means any money paid to any person in connection with the public offering of security under these Rules; (g) “cut-off price” means the lowest price offered by the bidders at which...
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...|IPO Valuation Procedure in Bangladesh | | | | | | | Internship Report IPO Valuation Procedure in Bangladesh Prepared for: Professor Shakil Huda Chairman IBA Career Center Institute of Business Administration University of Dhaka Supervised by: MsSyedaMahrufa Bashar Lecturer Institute of Business Administration University of Dhaka Prepared by: Asif Rezwan Roll: 64, MBA 44D and Management Trainee Officer, LankaBangla Investments Limited Institute of Business Administration University of Dhaka June 24, 2012 June 24, 2012 MS. Kanij Fahmida Assistant Professor Department of Accounting Faculty of Business Studies Bangladesh University of Business & Technology(BUBT) Dear Sir, Subject: Letter of Transmittal for Internship Report I, Ibna Shina Shibly, am submitting my internship report on “IPO Valuation Procedure in Bangladesh”. The internship period and the subsequent effort in writing this...
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...crime. The general public is held accountable, and yet, it is legal for members of Congress. There are several cases involving members of society being prosecuted for their illegal activity of insider trading; while Congress has exempted their members from acting on the same type of information. This type of conduct has serious legal, ethical and moral considerations. This paper will address the definition of insider trading. The legal, ethical and moral considerations of insider trading will be outlined, through a snap shot of the legal precedence recently in the press involving congressional behavior. It will further look at cases that have made headlines in past years, to show the distinction of what can happen to the general public who participate in insider trading. During a recent article by Parloff (2011), he stated, “The problem arises with respect to market-moving information a congressman learns in the course of doing his legislative work.” This comment is at the heart of the issue involving insider trading and Congress. The people elect members to Congress to act in their best interest. When the people of society feel members of Congress have violated that trust under legal, ethical, or moral wrongdoing, the members of society make decisions based upon those standards set by Congress. Thus members of society participate in insider trading knowing it is legally wrong. Insider Trading Insider trading can be a severe crime, as the general public is held answerable...
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...Strategy Berry’s Bug Blasters is a privately held business and wants to expand its operations. The business is considering three options for moving forward with the expansion plan. The first option is going public with an IPO, or Initial Public Offering. The second option is to acquire another similar business within the industry, and finally the third option is merging with another organization. All three of these options are viable choices and this paper analyzes each options for its viability and suitability to needs of the business. The paper identifies the strengths and weaknesses of the each approach, and well as the opportunities and threats posed by each option. The analysis begins with the strengths of the IPO, merger, and acquisition. Strengths of an IPO, Merger, or Acquisition Berry’s Bug Blasters could effectively expand its organization very rapidly through an initial public offering (IPO). An IPO would position the organization, after an underwriting process, to go from a privately owned company with modest annual revenues of $3.2 million to a public company that could put Berry’s on the Bug map. The strength of an IPO for Berry’s Bug Blasters would be in the cash generated by selling shares to the public. This additional capital could help the organization to expand into new territories; more readily compete within its industry, and even become a household name. A listing on a major stock exchange such as the NYSE would...
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...is all the hype about? What is an IPO, how does it work, and will a publicly traded Facebook affect how we use the social network on a daily basis? Here's a quick guide. WHAT EXACTLY IS AN IPO? When a 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...
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...Get the inside scoop on investment banking careers in the Asia Pacific region! Read this extended excerpt of the all-new Vault Career Guide to Investment Banking, Asia Pacific Edition and get the inside story on investment banking careers, including: • An inside look at corporate finance, sales & trading, research and other major functions at investment banks. • An oveview of equity and debt markets in the region • A discussion of industry trends and corporate culture in Asia Pacific • Days in the life of investment bankers in Asia Pacific This PDF is an excerpted version of the full 198-page guide To get the complete guide: • Purchase your own print or e-Book version of the guide. Go to www.Vault.com/Asia. • More than 900 universities and MBA programs worldwide subscribe to the Vault Online Library, providing more than 4.5 million students worldwide with access to Vault's guides and career information. Contact your career center today to ask about access to the Vault Online Career Library. ABOUT VAULT Founded in 1996, Vault is the leading global media company focused on careers. With offices in North America, Europe, India and Asia, Vault provides graduates and young professionals worldwide with insider information on careers and education through its award-winning web sites and career guides. CAR E E RS VAU LT CA R E E R G U I D E TO INVESTMENT BAN KING A S I A P A C I F I C E D I T I O N INVESTMENT BANKING JUNG B. LEE, TOM LOTT and the staff of vault ...
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...Introduction New Harvest Coffee Roaders is a brand which sells coffee. The firm “was founded in 2000 by RikKleinfeldt and Paula Anderson” (Retrieved from http://www.newharvestcoffee.com/about-us/who-we-are). They are located in the downtown of Providence, Rhode Island, in America but work all over the country. The main goal of this company is to offer high quality product produced in a sustainable process. To that, they firstly worked a lot with Fair Trade which was its main supplier. But as it “doesn’t really fulfill [the brand’s] objective” (Contemporary Business, Boone and Kurtz, 2010, p 565), New Harvest stopped working with them. Actually, the main point for New Harvest was they wanted to be able to select their product in view to control the quality of their final offer. And that was impossible by working with Fair Trade. So New Harvest developed its own sourcing way. That impact on many factors about the firm’s product such as the price but also the quality. Those both factors increase. The price due to the fact that suppliers weren’t helped by Fair Trade and the quality because New Harvest started to select and choice the coffee they bought. This way to sourcing the coffee is totally not concerning by the New York Stock Exchange regulation as prices didn’t follow the settlement of the “Big Board”. They are fixed after a negotiation between farmer and New Harvest according to the laws of supply and demand. The coffee is no longer considered as a commodity. New...
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...easy ones and they must carefully determine the best strategic approach or run the risk of financial ruin. Kudler Fine Foods Kudler Fine Foods is one such organization looking to expand its operations. Currently, Kudler Fine Foods owns and operates three stores all based in the San Diego, California area. Kudler Fine Foods, an upscale specialty foods store offering domestic and foreign foods as well as spirits to its customers, began in mid-1998 and within nine months was already making a profit. Kudler Fine Foods opened two additional stores, one in 2000 and one in 2003 (Apollo Group, 2011). Because business has been so good, management is looking at another possible expansion and is seriously considering the options available. In order to make the most beneficial as well as profitable decision, management must take its time and carefully weigh all its options before selecting the appropriate approach to expansion. The IPO approach In order to expand, management for Kudler Fine Foods must choose between three approaches. These three approaches include offering shares of its organization to investors and the public with an IPO, acquiring a similar organization within its industry, or merging with another...
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...1933 Act and the society by using the concept of libertarianism and the “vail of ignorance” of Immanuel Kant. In the second section, I examine the Securities Act of 1933 by using the accounting skill to argue that 1933 Act did not prevent the inside trading and financial statement manipulation. History of Act: public policy prescription: In the absence of the securities laws, a business firm could basically decide the stock price of their privately-owned company without any governmental supervision and, thus, be free to act with impunity in defrauding both the company and the public. This is the reason the stock price crashed down on “black Friday”. Securities Act of 1933 is in ascertaining that a firm’s disclosure is as accurate as possible, which makes the securities market more fair and transparent in its effort to control fraud perpetrated by unscrupulous business owners on a gullible public marketplace. Market failure: Business’ goal is always for the greatest profits, by taking the advantage of whatever ways they can use, such as fraud. In 1929, business people took the advantage of the absence of the securities laws to defrauding both the company and the public. Trace its implementation: Securities Act of 1933 is implemented by Securities and Exchange Commission(SEC), an independent quasi-judicial regulatory agency that was established by President Franklin D. Roosevelt after the great depression.The main goal of SEC is to regulate the stock exchange, the companies...
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...cash flows of gaining firms. During the summer 2007, this active market has taken a turn to the worse. The gaming market was split into three customer segments (day trippers, multi-night visitors and VIPs). Each of these customer segments were of different nature. Background of Macau Macau was the only place in China where gambling was legal. In 2006, for the first Macau displaced Las Vegas as the worlds gaming market. Because Macau’s $6.98 billion in gaming revenue exceeded Las Vegas’s $6.69 billion revenue. Macau’s gaming revenue would exceed $15.5 billion in 2010 whereas Las Vegas expected to generate only $8.67 billions. The market in Macau was sensitive to the decisions made by government in the region. IPO offering When the Melco announced initial public offering, MGM showed its willingness to pay $8 billion for Melcos equity. But they did not disclose that how MGM would finance the deal. But the problem with IPO is that it is a long, complicated process that can create a trouble. Takeover offer MGMs interest...
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...owned by a small number of company members and they will not offers their securities to the public. On the other hand, a public company is a company which owned by at least seven members and they offers their securities to the general public. However, 'Listing' is a process that a private company converting into a public company which the shares can be traded on stock exchange (Bursa Malaysia). Once the private company transformed successfully, the company is no longer owned by the individual and entrepreneurs but a group of shareholders (Asia Pacific Stock Exchange, 2012). Normally, company whose plans for listing or further growth will use an initial public offering (IPO) as a method to generate capital needed for expand. IPO is the first sale of stock to the public by a company. (CNBC, 2012) On the others sides, private company whose plan to go listing is for several purposes or benefits. For instance, the public company able to raise their capital by using IPO, simultaneously, a success IPO is an accelerator towards your company expansion. According to Bursa Malaysia listing statistics, in year 2012, there are 14 company whose listing in Main Market and 3 company in ACE Market. Recently, Tune Ins Holdings Bhd (Tune Ins), which is set to bet listed on the Main Market of Bursa Malaysia in February, 2013. (thestar, 2013) Tune Ins has publicize its IPO of 37.59 million shares to the public. On June 2, 2011, Groupon announced to the financial markets that Groupon was planning...
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...| JetBlue Airways | | Valuation of an IPO Case Study | | JetBlue Airways | | Valuation of an IPO Case Study | 2014 Ivan McClure, Imtiaz Saboor, Vanessa Lopes, Gilberta Pjetri 2014 Ivan McClure, Imtiaz Saboor, Vanessa Lopes, Gilberta Pjetri TABLE OF CONTENTS * History * Advantages & Disadvantages of an IPO * IPO Process * Weighted Average Cost of Capital (WACC) * Similar Company Analysis * Discounted Cash Flow Analysis * Final Decision History David Neeleman, an experienced entrepreneur in airline startups, announced that JetBlue would bring “humanity back to air travel” on July 1999. He was convinced that his commitment and innovation would keep the planes full and moving despite the fact that 87 new-airline startups had failed in the last twenty years. An impressive new management team and growing group of investors shared Neeleman’s vision. JetBlue’s management team included David Barger, former vice president of Continental Airlines. Neeleman received strong support in funding from high-profile firms such as Weston Presidio Capital, Chase Capital Partners, and Quantum Industrial Partners, and quickly raised $130 million. Neeleman’s goal was to “fix everything that sucked about air travel”. His strategy was built on that goal as well providing the passengers with new aircraft, simple and low fares, leather seats, free Live TV at every seat, pre-assigned seating, and high quality customer service...
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