Business -- Corporate Finance -- Initial Public Offerings
AVG is a state-of-the-art IT security company that has been very successful, has aggressively acquired other companies, does business worldwide, and is poised to use an IPO to raise capital. There is a question about whether a traditional IPO or a nontraditional auction-based method would be the better choice for AVG. The pros and cons of traditional vs. nontraditional IPO methods will be considered, including lessons learned from the nontraditional approach used by Google and Morningstar. Finally, the lessons learned by Module 1 will be discussed and evaluated.
AVG Should Use a Traditional IPO Instead of an Online Auction.
AVG is an IT security company for consumers that has taken over a number of other companies since AVG started in 1991 (AVG Technologies, 2013). AVG announced an IPO of 8 million ordinary shares (with 50% from the company and 50% from shareholders)…… [Read More]
Google and the IPO Process:
Google's initial public offering or "IPO" is undoubtedly one of the hottest topics of the day. Like many initial offerings springing from well-known and successful companies, many investors harbor great optimism regarding the potential of the company in the IPO phase. However, like most initial offerings, Google's endeavor is full of several complex, unusual, and uncertain factors. Be that as it may, one must begin with the "facts."
Google's IPO date was on the 19th of August, 2004, and was started at a price of $85, significantly lower than its previously projected low price of $108. Interestingly, Google choose to use an innovative way of offering the sale to the public via "modified Dutch Auction," in which 19,605,052 shares were offered at a value of $1.67 billion, with an initial market cap of $23.1 billion (About, 2004)
Financial Management Strategies and a Break with Convention:…… [Read More]
Business -- Corporate Finance -- IPO for AVG
hat type of IPO should AVG use -- a traditional IPO or an online auction? Based on your analysis and findings, what would you recommend to the executives of AVG? Explain your reasoning in detail.
AVG Technologies N.V. is a "consumer-focused IT security" company seeking to "simplify, optimize and secure" the Internet for its users (AVG Technologies, 2013). Founded in 1991 and based in Amsterdam, AVG has aggressively acquiring other companies such as Ewido, Exploit Prevention Labs, Sana Security, Visionize, DroidSecurity, TuneUp, Bsecure, Ookla, and OpenInstall (AVG Technologies, 2013). On February 1, 2012, AVG announced its IPO of 8 million ordinary shares -- 4 million from the company and 4 million from shareholders - @ $16.00/share, to begin trading on the NYSE on February 2, 2012 (AVG Technologies, 2012). Following SEC procedures, AVG filed a Registration Statement with the SEC, which the…… [Read More]
Business -- Corporate Finance -- IPO Facebook
Provide a brief description of the company you chose, its main business and operational activities and a short synopsis of the main developments of the company over the past few years
Facebook, Inc. is a global social networking company building and employing tools and applications for communication among its users on computers and mobile devices. Incorporated in 2004, Facebook, Inc. has approximately 5,299 employees and more than 1.06 billion monthly active users on its web site: http://www.facebook.com. Its corporate headquarters are located in Menlo Park, CA and its corporate staff consists of: Mr. Mark Zuckerberg, Founder, Chairman and Chief Exec. Officer; Mr. David A. Ebersman, Chief Financial Officer; Ms. Sheryl K. Sandberg, Chief Operating Officer and Director; Mr. Michael Schroepfer, Chief Technology Officer and VP of Engineering; and Mr. David B. Fischer, VP of Marketing and Bus. Partnerships.
Facebook, Inc. is a publicly…… [Read More]
1. Executive Summary
EbonyLife Network is going public on the Nigerian Stock Exchange. EbonyLife has been a private company since 2013, but has quickly risen to the top of the Nigerian entertainment market by offering top-notch entertainment, stellar streaming services, critically- and internationally-acclaimed, in-house produced films, and a variety of shows in a range of genres for all demographics. Now EbonyLife Network is giving investors the opportunity to stake a claim in the company’s success and in its future with an initial public offering (IPO). The company seeks to raise $500 million in capital to fund its expansion, as it seeks to grow into commercial centers, develop state-of-the-art luxury cinemas, and bring the latest in technology to its fans—including the Amazon Box with WiFi stick and EbonyLife ON. This information memo provides data on EbonyLife, its products and services, its target market, its revenue and employee profile, and how it…… [Read More]
Initial Public Offerings (IPOs) are the first time a privately held company sells its stock to the public. When such corporation needs to raise additional capital, it can either take on debt or sell partial ownership. If the corporation chooses to sell ownership to the public, it engages in an IPO
(Initial Public Offerings, 2011, p. 1). Although it is difficult to get on the ground floor of an IPO for small private investors there are still ways that these individual investors can make money on the IPO market because full-service and online brokerages are increasingly offering IPO shares to their customers reducing their financial risk of investing (Initial Public Offerings, 2011, p. 1).
Despite this apparent benefit, there are also many drawbacks linked to an IPO. A large drawback to going public is that the current owners of the privately held corporation losses a part of their…… [Read More]
Google had reported profits of $191 million, while Amazon reported losses. Obviously, the difference in share attractiveness that resulted from this financial fact was clearly in favour of Google's eventual share growth.
Basically, we can conclude that Google was at the right moment for an IPO and, additionally, the company was clearly much healthier and more prepared to have a significant subsequent share growth.
1. Reeves, Scott. IPO Outlook - Google's Flub, Flop and Bomb. Forbes.com. September 2004. On the Internet at http://www.forbes.com/home/strategies/2004/09/17/cx_sr_0917ipooutlook.html.Last retrieved on July 06, 2007
2. Befumo, R. (1997, May 1). Amazon.com Debuts. The Motley Fool. Retrieved August 2, 2006, at http://www.fool.com/Features/1997/sp9701aAmazonDebuts.htm
3. IPOGoogle.org. (n.d.) the Google Initial Public Offering: August 13th, 2004. Retrieved August 2, 2006, at http://www.ipogoogle.org/
4. Salkever, a. (2004, May 3). The How and Why of Google's Auction. Business Week Online. Retrieved August 2, 2006, from http://www.businessweek.com/technology/content/may2004/tc200403_9962_tc024.htm
. Watson, J. (2001, February…… [Read More]
IPO for AVG?
An Initial Public Offering (IPO) is described as the first sale of stock by a company that seeks for further growth. IPO is commonly used by such companies in order to generate necessary capital for expansion. AVG is an example of a company looking for further growth through an initial public offering since the firm is uniquely positioned to lead innovation in the industry. While the company announced filing for proposed initial public offering in 2012, the main concern is whether to use the traditional IPO approach or an untraditional one. It's still unclear which approach AVG will use because of its global online audience and untraditional business model. Even though the traditional IPO approach has commonly been used in the past, the untraditional method or online auction was a process that emerged through Google and Morningstar initial public offerings. The determination of the most appropriate IPO…… [Read More]
Business -- Corporate Finance -- IPO SLP
Facebook, Inc. is a social networking company that engaged in a simultaneously successful and flawed IPO resulting in multiple lawsuits against the company and its underwriters. Though the IPO traded on huge volume and raised $16 billion, it also reportedly resulted in the loss of $billions to investors due to stock overvaluation and supposed mismanagement. Due to these successes and failures, Facebook, Inc.'s IPO is a success story but also a cautionary tale.
Facebook, Inc. is a social networking company that was incorporated in 2004, has more than 5,000 employees, maintains its corporate headquarters in Menlo Park, CA and has more than 1 billion monthly active users on its site: http://www.facebook.com. It is a publicly traded corporation on the Nasdaq 100 and AMEX and its current stock price is $46.26 as of November 22, 2013 at 7:53PM EST (Yahoo, Inc., 2013). Facebook's Sales/evenue…… [Read More]
One of the most common challenges that firms will face is taking a company public. This is because the timing must be right and there needs to be clear objectives as to where new investment capital will be utilized. Those firms that are taking these factors into account will have a more successful initial public offering (IPO). In the case of Avaya, the company is considering an IPO in the near future. However, there are challenges in determining what tactics should be utilized to attract the most interest. To decide this requires examining: the type of investors that Avaya is trying to draw, the lesson learned from the Google / Morningstar IPOs, the advantages of each type and the costs / risks. Together, these different elements will provide the greatest insights as to how Avaya should go public.
The type of investors Avaya is likely to attract
The…… [Read More]
The executives at Morningstar had deliberated that their decision with a lot of people, inclusive of critical investment bankers prior to the actual offering. The minimum experience of an auction IPO companies are normally encouraging. One recent occurrence has been the recent exclusion wherein CyroCor Inc. offered shares through the auction route at $11 per share in a July auction and has lost 50% of its value since then. It follows from this that the auction route for raising capital through issue of shares does not favor every company. However, there are some positive aspects and companies must fancy the odds of auction route as the real option. All companies encounter a non-stop auction for their stock from the point they start trading in public. (Syre 2005)
Wall Street was extremely cynical as regards the Google's Dutch-auction IPO, that restricted banker's impact by opening biding to the public and fixing…… [Read More]
To begin with, publicly owned entities according to Brigham and Ehrhardt (2010) are required to submit to SEC their annual as well as quarterly reports. As the authors' note, these reports could end up becoming a costly burden. You should therefore take into consideration reporting costs before taking Cleveland Cavaliers public. Yet another factor you should consider is the IPO cost. In the opinion of Weaver and Weston (2007), costs in this case could include accountant fees, legal fees, underwriter expenses, etc.
Secondly, Weaver and Weston (2007) point out that once an entity is taken public, the original owners have to share ownership. This according to the authors occasions some considerable loss of control. Indeed, you need to be aware that on taking Cleveland Cavaliers public, only decisions supported by a majority of shareholders will sail through irrespective of whether you (as the founder) are in favor of such decisions…… [Read More]
One of the most common ways that thousands of corporations will raise additional capital to fund continued expansion is: through the public markets. This is because the various bonds, stocks and private securities offerings (private placements / limited partnerships) are helping to provide them with the added liquidity to achieve these objectives. As an increasing number of companies are turning to this option through what is known as an initial public offering (IPO). This is when a company will issue stocks, bonds or other type of securities when they are first going public. In most cases, these are new businesses that are seeing significant amounts of growth and are turning to the public markets to increase their working capital. ("Initial Public Offering," 2010) This is an important step for the organization that is being examined, as the IPO will help to increase its liquidity and provide the necessary…… [Read More]
This literature review looks at the question of SEO return characteristics of large and small firms from several different perspectives. The goal is to determine whether small firms are more effected by the equity offering than larger firms. This section examines the overall evidence for performance issues (including financial anomalies and manager performance) and whether research indicates evidence for a rational or behavioral explanation.
A firm's success in a seasoned equity or initial public offering is determined by many factors that are seemingly disconnected, but which the research shows are interdependent. Among these are the anomalies that cannot adequately be described by rational theories of pricing. As an example, Li (2012) suggests that the cyclical nature of the economy has a far greater effect on certain types of offerings (IPOs and SEOs among them) than was previously thought. Again, the relatively unpredictable nature of firms and investors…… [Read More]
Shi Jianqiao became a media sensation in Nationalist China during the 1930s for shooting the ex-warlord Sun Chuanfang, a leading member of the Tianjin Qingxiu lay-Buddhist society (jushilin). She shot Sun three times on November 13, 1935 in prayer hall (congregation site) on Nanma Road. Although she was prosecuted for murder, the courts returned a controversial final verdict of judicial leniency, and the Nationalist (Guomindang) regime overturned this final verdict by issuing a state pardon. These events led to a public debate on the merits and demerits of filial revenge, although contemporary accounts do not examine the larger sociopolitical implications the case may have had. Shi Jianqiao represented the female assassin's singular and violent expression of filial sentiment (xiao), as well as the female warrior code of "chivalrous virtue" (xia), and helped give rise to a new communal form of ethical sentiment - "public sympathy" (tongqing). For liberal…… [Read More]
Facebook is operating on the communication and social segment of the it industry. In this sense, it is offering a multitude of services to its clients, which include, besides the actual chat or forum-like services, photo and video sharing and, increasingly, the capacity to generate an entirely customized and personalized page for the user. From this point-of-view, we can identify primary competitors, competing in the social segment of the industry, but also secondary competitors, who focus on partial components, such as photo or video sharing.
In terms of the primary segment, the most important competitor that Facebook has is Myspace. Myspace has successfully benefited from being launched earlier so as to attract an additional 30 million users, ranking at 100 million users before Facebook's 70 million. Bebo and Blackplanet also provide important competition on the primary market, however, the ain competition is between Facebook and Myspace. Both sites try…… [Read More]
CHIP: To Abolish or Not to Abolish
The State Children Health Insurance Plan (SCHIP), commonly referred to as CHIP (Children's Health Insurance Plan), is an insurance plan run by the Department of Health and Human Services, and which administers funds to states to enable them provide quality insurance coverage to eligible children within their jurisdictions. To be eligible for CHIP, a child needs to be from a family whose level of income is too low to qualify for private insurance coverage, but too high to be considered for Medicaid (Holtz-Eakin, 2014). With the introduction of the Obama Care Policy, however, which expanded the list of persons eligible for both Medicaid and CHIP, there came so many overlaps between CHIP and other secondary insurance options that budgetary allocations and funding to the former were threatened. Owing to this, there is a lot of controversy over whether funding to the CHIP ought…… [Read More]
Hyde Piper Story:
The Hyde Piper is a residential-turned-industrial pipe cleaning and repair firm located in Hyde County, North Carolina. While the firm was initially a residential pipe cleaning and repair company, it changed its emphasis and relocated to Texas after receiving more requests for industrial applications. The management of the firm includes Will Drayne (principal owner), Harris Tock (Chief Financial Officer), and Conlan DeWitt (the vice president of marketing). Before relocating to Texas the annual income of The Hyde Piper grossed to $1-2 million every year. However, since relocating to Texas and focusing on industrial applications, the company generates in excess of $50 million annually and has huge contracts with oil and gas refineries. Hyde Piper's Expansion:
As previously mentioned, the main reason for Hyde Piper's expansion and relocation to Texas from North Carolina was because of the huge number of requests for industrial applications that the company received.…… [Read More]
How firm raise capital by using venture capital? What conditions we need to raise capital by using venture capital?
Many startup companies are not mature enough to obtain capital from the public or secure a loan with the local banks in their area. They therefore, have to rely on venture capital as a way of raising capital for the firm to continue with the daily operations. Firms hence, raise capital by going out and looking for people who are willing to invest their money in a company that they see has the potential for growth. The company looks for a number of people who can pitch in large amounts of money depending on the nature and type of the business which if successful is expected to give above average returns to investors (Krishnan & Ivanov et al. 2011).
There exist certain conditions for a firm to secure capital…… [Read More]
In the future, this could result in some kind of major restructuring to deal with these issues. The problem is that these changes will occur when the company is facing greater challenges. This will hurt their competitive position, profit margins, stock performance and brand image. The above information will impact an investor's decision, by making them more cautious about purchasing the company over the long-term. ("The Coca Cola Company," 2012) ("Pepsi Co," 2012)
As far as Pepsi Co is concerned, the management has taken a continuing focus on expanding into new areas. This has resulted in the company owning different food, beverage and snack manufacturers. In these situations, the firm is concentrating on the impact that key acquisitions will have on Pepsi and its ability to enter new markets. ("The Coca Cola Company," 2012) ("Pepsi Co," 2012)
This strategy has proven to be highly successful. As the company is able…… [Read More]
Many companies go public so that they can expand and so that they can offer employees additional benefits. In addition Shepherd, et al. 2001 asserts that An initial public offering appears to offer the entrepreneurial company a number of benefits, including legitimacy with stakeholders, access to debt capital (Sutton & Benedetto, 1988), and a mechanism by which entrepreneurs can reacquire control from investors (Black & Gilson, 1998). For investors, an IPO represents an exit mechanism (Sutton & Benedetto, 1988). Sahlman (1990) documents that almost all of the returns on venture capital funds are earned on companies that go public. Bygrave and Timmons (1991, p. 159) note that "hot IPO markets are by far the most important cause of peaks in venture capital returns (Shepherd, et al. 2001)."
As it relates to IPO and the current market environment the main incentive is still raising funds to expand the company and solidify…… [Read More]
This is done primarily to attract buyers to the offering. By selling the shares below value, it is believed that any rational investor would be enticed. Rational investors would know that when full information about the company comes to light, the market price of the shares will move to the true, rational value point. Thus, their investment during the IPO process would virtually guarantee them a profit.
An overpriced offering is one in which the shares are priced above the book or reasonable market value. Typically, a firm that overprices an offering understands that the offering will not sell out but is willing to accept this is return for a higher price. Alternatively, an issue may be overpriced if the issuing company believes that the market is irrational (such as during the dot-com boom, for example). In that scenario, the issuer would know that the market price is not the…… [Read More]
There are no other material costs related to the Offer is expected.
15. Who is the investigating accountant for this prospectus and what is their role?
Tiaro Coal Limited's investigating accountant is DO Kandalls Corporate Finance (NSE) Pty Ltd. The purpose of the investigating accountant's appointment is to report on the concerns raised in Australian Securities Investment Commission's (ASIC) application in relation to the Offer. The report must comply with the Australian Auditing Standard (AUS) 804 or at least, the reasonableness of the report can be appropriately verified (Cockburn: 2002: 1).
16. What are the risk factors associated with this prospectus and briefly describe each?
Investing in Tiaro Coal Limited involve embracing the susceptibility to uncertainties and risks. According to Section 10 of the Prospectus, Tiaro Coal's business activities are subject to both business risks and general risks. In relation to the nature of the business, there is the associated…… [Read More]
There are several candidates for taking charge of Gene One during its initial public offering and for some time following, at least until the company has stabilized in its new position, if not for longer. There are of course positive aspects and drawbacks to each of the potential company leaders, but any negative aspects of one individual's leadership can be mitigated by a more temperate and even handed leadership structure, yet one that still allows for efficient and decisive decisions to be made and carried out.
Studies have shown that leadership is often more even-handed when measured in terms of influence rather than in terms of procedural behavior, and this knowledge will be directly and explicitly applied to the Gene One leadership structure in the situation at hand (Hysom & Johnson 2006). Michelle Houghton and John Kirby will be the primary decision makers for the company; Houghton's commitment to the…… [Read More]
The means by which the company could enhance its public perception are countless, having however the downside of requesting sustained financial investments.
A first means by which the new leading team could implement change and improve the company's perception is that of developing and implementing strong media campaigns. These campaigns would be constructed on the visionary ideas of the late Don uiz and would point out the benefits of the healthier products obtained through biotechnology. These campaigns would have a twofold benefit in the meaning that they would, on the one hand, familiarize the public with the company and improve its reputations, but on the other hand, they would also familiarize the customer base with the products, generating as such increasing levels of demand for the Gene One products and services.
The second means by which Gene One could enhance its public perception is that of becoming more involved in…… [Read More]
Sub- Financial strategies creation Analyse case ImmuLogic pharmaceutical corporation - a consultant .Write report/analysis & 3 pages calculation
ImmuLogic Pharmaceutical Corporation
ImmuLogic Pharmaceutical Corporation is a relatively novel firm, with only four years of experience within the market. The organization nevertheless possesses increased potential and has decided in favor of going public in an effort to generate an expected $80 million in capital. Still, in a context in which the firm does not yet have a commercially viable product -- and this would take an additional four years -- a question is being posed relative to the future sustainability of the initial public offering. In other words, the company's executives now wonder whether or not they should proceed with the IPO, or whether they should withdraw it.
The offering of such an answer is an intricate endeavor, and it would be based on a multitude of aspects. At the initial…… [Read More]
Amazon and eBay. Both companies were among the first movers into the Internet. Amazon opened the doors to its online store in July, 1995 and completed its initial public offering in 1997. eBay was also founded in 1995 and went public in 1998. These two companies have always been among the leaders in e-commerce. Amazon began with a focus on books and music. It soon expanded its product lines significantly to become a general merchandiser. Amazon is also an intermediary for third party vendors. eBay has always played the intermediary role. Unlike Amazon, where goods are offered for sale, eBay has used an auction platform in order to move its goods, taking a fee on the sale. Both companies remain as industry leaders. Amazon has withstood challenges from leading bricks and mortar retailers to remain as the number one vendor on the Internet (Internet Retailer, 2012). eBay has struggled to…… [Read More]
Hertz LBO Case
How does the dual-track process used by Ford to initiate consideration of strategic alternatives affect the bidding process for Hertz?
The dual-track process has created a rather interesting environment for potential investors. Not only are investors competing with each other, but if the case that a deal is not worked out then Ford has made provisions for the company to be made public through an initial public offering (IPO). Hertz is a well establish company with global operations. Furthermore, it has a stable revenue history that has had an extraordinary amount of consecutive growth. Plus Hertz has built a great deal of brand equity worldwide; especially in regards to the airport services they provide.
All of this makes works to make Hertz an ideal candidate for a leveraged buyout. The interesting aspect to this case is how the dual-track process was structured. Ford must have known…… [Read More]
fictional firm (RMD) can be able to offer pre-IPO's to investors. This is accomplished by looking at the way various policies can be implemented that is in compliance with the Securities Act of 1933 along with the Securities and Exchange Act 1934. Once this occurs, is when we can be able to see how they can create a unique market that will address this demand from retail and institutional investors.
Over the last several decades, demand for pre-IPOs (initial public offerings) has been increasing exponentially. Part of the reason for this, is because there has been a shift in the focus of investors. As a large number are realizing that they can make significant returns by investing in these companies before they are going public. Evidence of this can be seen by looking at the below table which is highlighting how high investor demand for pre-IPO's had an impact on…… [Read More]
Strategic Management EVISED
Crocs Inc. is a publicly traded corporation on the NASDAQ under the symbol COX: the company completed its initial public offering in February of 2006, and is thus a little over eight years old. The Colorado-based company is known primarily for its brightly-colored foam-based shoes, which were first manufactured in 2002 as footwear for beaches and spas, but which quickly expanded. The company went public at the precise moment when its popularity with consumers was experiencing explosive growth, and thus the eight years as a publicly-traded corporation have been difficult and tumultuous. At its peak in 2006, shortly after the initial public offering, shares of Crocs Inc. traded at over sixty dollars apiece; in 2014, shares now trade at less than thirteen dollars apiece (Mattoli & Spector, November 2013, para.2). However, because of the limitations inherent in Crocs' business model, the company makes an excellent case study…… [Read More]
Sarbanes-Oxley Act on a Medium Sized Company
The following paper begins with a discussion of the benefits of going public. The paper then gives a comparison between a public and private company. It focuses on the fund raising procedures of the private companies as well. The paper also discusses the ratios that are evaluated at the time of and IPO and determines the impact of these ratios on the decisions of the company. The paper then discusses the positive and negative impacts of the Sarbanes-Oxley act and finishes with a recommendation about whether to continue as a private company or go public.
Benefits of Going Public
Going public refers to an initial public offering of a private company. An initial public offering is the first time a company offers its shares to public. Different companies have different reasons for going public. One of the reasons is to obtain capital. Privately,…… [Read More]
The company showed a global reach early, adding numerous language versions around the world. In 2000, the company reached 18 million search queries per day and officially became the world's largest search engine ("Google, Inc." paras. 11-14).
The company now sought to address its need for income by introducing a keyword-targeted advertising program for another source of revenue. The company partnered with Yahoo! And with other partners, such as China's leading portal NetEast and NEC's BIGLOBE in Japan. Google introduced Adords, a self-service advertising program that could be activated with a credit card. By December of 2000, Google received more than 60 million searches per day and reached the 100-million search mark per day in 2001 ("Google, Inc." paras. 15-16).
Google as a Public Company
Google would offer an IPO of stock beginning in 2004. McShane and Von Glinow cite Google as a successful company, especially in terms of navigating…… [Read More]
Organizations seeking to expand their operations have a wide range of expansion options at their disposal. Choosing the right option in this case can be rather challenging. My organization which plans to expand its operations is faced with this same challenge. Some of the options that have been explored in this case include the issuance of shares to the public through an IPO, merger with another entity, and acquisition of another entity in the same industry.
Issuance of Shares to Members of the Public through an IPO
In basic terms, an initial public offering (IPO) according to Lasher (2010) is the initial sale of securities to members of the public. One of the key benefits of an IPO has got to do with the creation of new capital for an entity (Smart and Megginson, 2008). The authors also note that when it comes to an IPO, a company…… [Read More]
Pacific Brands Limited
The Burst Bubble
Background Information and Industry Overview
Effects of the Global Recession
Balance Sheet Movements
In a perfect marketplace, such as the one championed by the proponents of the efficient market hypothesis, assets would be automatically priced correctly by the magic of the market place. However, in the real world, corporate assets often are overvalued or undervalued based on speculative pressure or possibly asymmetric information. The global recession caused havoc with its extensive intrusiveness into a plethora of unrelated industries. The common denominator that plagued seemingly unrelated industries is that consumer confidence fell through the floor.
Pacific Brands Limited was by not immune by any measure to the pressures placed upon them by the faltering market. In fact, it was quite the opposite. Since Pacific Brands claimed a holding that included an enormous amount of value in regards to its intangible assets it was more exposed…… [Read More]
External and Internal Environments
External & Internal Environments Business
CBS Outdoor Americas Inc. (NYSE: CBSO) leases ad space in the category known as Out-of-Home (OOH) advertising throughout the United States, Canada, and Latin America (oss Sorkin, 2014). CBS Outdoor went public in April 2014 and separated from CBS ?Corporation (NYSE: CBS.A and CBS), the broadcaster and owner of Showtime, as the final step following its initial public offering (IPO) (oss Sorkin, 2014). The shares of CBS Outdoor rose 18% since the IPO in March 2014 (oss Sorkin, 2014). CBS Outdoor offers a range of outdoor advertising options that are designed to target somewhat different markets: Billboards, bus and railroad media, mobile billboards, specialty advertising signs, sports media, street furniture, and walls (oss Sorkin, 2014). A specialty of CBS Outdoor is an extensive multi-media digital inventory in many of these markets, and highly sophisticated mobile interactive capabilities that extend to all…… [Read More]
What this organization has is a culinary leadership and this is not present in many similar organizers of events. This leadership enables all the partner venues to benefit and the collective talent and creativity of the entire culinary staff is spread all over the organization, in all areas. An organization like this cannot grow in isolation and has to coordinate and facilitate the sharing of ideas, techniques and award winning recipes for the preparation of different items. This has to take place not only within the organization, but also among the total community of chefs, even if they are working in other organizations.
This requires close coordination and for final and regular preparation of the items there has to be standards, increased efficiencies and total improvement of menus and services. Only through a close attention to detail, it is possible to provide the best that is available to the clients.…… [Read More]
Entrepreneurship is a risky business and requires a certain type of personality to really succeed at this lifestyle. Every and any business or idea will certainly end when the time is right and it is important for those wishing to exploit profits when to get out of the business. The purpose of this essay is to explore the options that entrepreneurs and investors have to recoup their investments and continue on to the next stage in life. This essay will explore exit strategy options and the considerations that must be taken into account before performing these actions. Ultimately this essay will describe how exiting a business venture is just as important as any other component of the process.
Why Get Out?
There are many reasons why anyone would want to change something up in their lives, but when it comes to venture capitalism it is important to understand…… [Read More]
What is the IPO under pricing and why might is persist?
IPO under pricing is the practice of the investment bank or banks serving as the underwriter(s) for the IPO selling to the people and institutions on the IPO list at a price below the expected market value of the stock (Carey, 2008). Though this occurs ostensibly because it is not possible to accurately peg the market price of an unlisted stock and because it is necessary to reduce risk, research shows that it more likely persists because it creates substantial profits for the initial investors who are strong clients of investment banks (Carey, 2008).
What is the relationship between IPO and underpricing? (What will increase or decrease? How that will help to raise capital and benefit company and investors)?
When underpricing occurs, the price of the initial stock purchase -- which is the only money that goes…… [Read More]
A fourth foundational element is the strength of the Starbucks brand itself and is ubiquity globally. As a result of rapid and well-defined strategies for opening up retail stores, Starbucks is now considered one of the most preeminent and strongest brands globally.
Starbucks has generated the strength of their brand through combining high-quality coffee and tea beverages with the third-place concept to generate customer loyalty and world-of-mouth among customers and their friends. It is common to hear students mention they will have a team meeting at the local Starbucks, for studying or completing projects.
In summary the Starbucks model is strengthened by the company's coffee expertise, impressive new product development record, and the development of Starbucks locations as "third places" where friends can meet and enjoy coffee and pastries. Underscoring all these points is the strength of the Starbucks brand.
What were the key issues and the decision by Starbucks…… [Read More]
68 for profit after taxes in 2002, much higher than the placement option. The EBIT/interest grows at exponential rates to reach 81.14 in 2002, but the EBIT / (interest + amortization), is only at 2.48.
With both alternative sources of finance, the company faces some operational, economic and financial risks. First of all, the operational and economic risks need to be considered. Indeed, if the company is borrowing long-term capital and the investments it makes do not prove viable, then the financial burden of having to pay off the sums that it has borrowed will be too much for the company to support itself financially. The projected cash flows are optimistic, but one also needs to consider whether they are realistic or not. At the same time, an IPO is risky before the public may not be ready for it and the capital would eventually not be successfully raised. As…… [Read More]
Superior Living Final
CEO, CFO, Superior Living
New Production Facility Proposal and Initial Public Offering (IPO)
This report will address a few of the different strategic issues that the company faces going forward. e know that the company is proposing to build a new production facility, and there are a lot of concerns internally about that proposal. This proposal must be considered from a financial and strategic perspective. From a financial perspective, there are a number of metrics that can be used to help evaluate this project. A common metric is payback period, and I know that some on the Board want to see the payback period for this project. However, if we are taking the firm public, our investors will want to see that we are undertaking the strategies that will increase firm value. Thus, we have to base our decisions on the metrics that actually measure the impact…… [Read More]
Firms may be successful by satisfying customer needs, but their ultimate accountability for financial performance is to the owners of the firm. Actions undertaken by quoted firm will usually have the direct, or indirect, aim of generating revenues and profits for the firm, and therefore the owners (Tarraf, 2012). When investors assess a potential investment they will look at the financial performance of a firm, assessing the past performance, with consideration of the way current and expected strategies will impact on the organizations performance, in the context of the expected macro-environmental conditions (Bodie, Kane, & Marcus, 2014). The investors will assess the share price of the firm, being more likely to make a purchase if they believe the value of the share is likely to increase with a significant amount of the assessment based on assessments of past performance (Hens & Rieger, 2016; Nellis & Parker, 2006). This…… [Read More]
In summary, we recommend that the IESBA reconsiders the proposals in the Exposure Draft and provides more guidance on safeguards applicable to sole practitioners and small accounting firms to ensure that the benefits of the changes outweigh the costs to SMEs. Under a principle-based approach, there should be safeguards and practical relief for all practitioners rather than rules-based outright prohibitions. The rewrite of this Independence component of the Code is substantially rules-based rather than principles-based. In this regard, we also encourage the IESBA to prioritize the redrafting of the entire Code using a similar drafting convention to that used by the International Auditing and Assurance Standards Board in its Clarity project" (IESBA Exposure Draft of Sections 290 and 291 of the Code of Ethics on Independence - Proposed Additional equirements in relation to Internal Audit Services, elative Size of Fees and Contingent Fees 2007).
There will also be an all-time…… [Read More]
Com industry crash after the boom
This is a paper examining some of the factors that caused the dot-com crash
Many believe the root cause of the dot-com crash was over valuation of stock prices relative to the actual underlying value of the companies themselves. Stocks of Internet companies traded at Price-Earning ratios of higher then 30, buoyed by a speculative bubble. When reality set in for investors many realized that the companies that they were so heavily invested in were little more then money sucking black holes with no upside potential in the near or long-term future. This triggered mass self-offs of not only Internet related stocks but soon impacted the market value of many companies associated with computer, network or telecommunications industries.
This paper will show in fact that over valuation was more a symptom of the speculative boom and was only one of the multifaceted factors that…… [Read More]
The political pressure of the past several years following the dot.com bubble and the collapse of several major companies created a need for new securities legislation, which culminated last year in the Sarbanes-Oxley Investor Protection Act, which establishes new guidelines for the securities industry. Initially a Democratic brainchild, the act became favored by epublicans in the House when it was realized that such adjustments would be of great benefit to shareholder value in that they enhanced general financial stability. This is the most prominent piece of financial legislation since the establishment of the Securities and Exchange Commission in the early 1930's. The most widely recognized feature of the new legislation, which was introduced in 1992, is that board members are held personally and criminally liable for the accounting practices that the company employees. This act also establishes guidelines as to the coverage of securities by sell-side analysts who face…… [Read More]
Hyatt Value IPO Journey Book
Hyatt Corporation Value IPO Journey Book
Hyatt Corporation is a global company widely known for its brand of hotels, resorts, residential, and vocation ownership properties. Established by Jay Pritzker in 1957, Hyatt's worldwide portfolio consists of 453 Hyatt-branded properties scattered in the North America, Europe, Middle East, Africa, Latin America, Asia Pacific and Southwest Asia. Hyatt manages franchises and develops residential and brand hotels, and the company full service hotels is operated under five brands which are Hyatt, Park Hyatt, Hyatt egency, Andaz, and Grand Hyatt.(Corporate Information 2011). Since the beginning of the year 2000, Hyatt has been performing excellently, and the company cash flow has doubled during the period. However, in 2009, Hyatt's revenue fell by 19% and the company's cash flow fell by 50%, which made the company to post the loss of approximately $36 millions in the first quarter of 2009. In…… [Read More]
Managing All Stakeholders in the Context of a Merger Process
Review of the Relevant Literature
Types of Mergers
Identifying All Stakeholders in a Given usiness
Strategic Market Factors Driving Merger Activity
Selection Process for Merger Candidates
Summary, Conclusion, and Recommendations
The Challenge of Managing All Stakeholders in the Context of a Merger Process
Mergers and acquisitions became central features of organizational life in the last part of the 20th century, particularly as organizations seek to establish and maintain competitiveness in an increasingly globalized economy (Nevaer & Deck, 1996). Mergers are generally described as being the formal joining or combining of two corporations or business (Prichett, 1987), although both the framework and the method of merger vary greatly. The reasons for mergers are different based on what a company is trying to accomplish. The acquiring firm may seek to eliminate a competitor; to increase its efficiency; to diversify its products, services,…… [Read More]
"Yet earnings estimates have acquired a life of their own and often generate more attention from the media and analysts than a company's actual financial results." (Whalen, 2003).
More conservative critics of analyst conflicts rules believe that they are a step in the right direction, but view them as a work in progress. For example, the Sarbanes-Oxley bill, which mandated many improvements in corporate managers' financial practices, did nothing to reduce the unethical practice by many managers of communicating only with those analysts who cooperate with management's forecasts of the future (oni and Womack). This and other rules need strengthening.
Wall Street Journal reported in April 2003 that the brokerage firms of the top investment banks are still more likely to give optimistic research recommendations to their own banking clients, calling to question if new disclosure rules reapply protect investor clients (oni and Womack). With all the hoopla to protect…… [Read More]
Senior Executives DuPont divesture Conoco
Whether the divesture is made from a financial perspective is a function of all underlying factors responsible for producing the expected results. Underlying factors include the financial stability of the company as a holistic organization, and the reasons behind the divesture with respect to the current industry positioning. Additionally, the divesture is anticipated to save money. The expected increase to profits, if any, and the expected decrease in operating costs as a function to the increase in profit, should be estimated.
The notion of the DuPont Company divesting Conoco Corporation is to say that Conoco is a failing brand that is reducing the profitability and perhaps the growth rate of DuPont as well. Financially, the divesture is a means to reduce costs if the expense of maintaining a specific line of business becomes exceedingly prohibitive when considering the current underlying profitability of the business…… [Read More]
There has been increase in the number of franchise stores that are operating, which generate critically needed income for the company. Currently, the company is also involved in a credit agreement that contains provisions that, among other requirements, restrict the payment of dividends and requires the company to maintain compliance with certain covenants, including the maintenance of certain financial ratios (Management Discussion and Analysis (MD&a) of 10-K for 2007: 36). This may make it less attractive to shareholders although it may mitigate the lending institution's risk.
Through investment, joint ventures, and expanding its operations management hopes to improve the company's long-term health. But overall, market trend analysis is dim from a managerial perspective. The company is exposed to market risk from changes in interest rates on its outstanding bank debt. This makes it more difficult to substantially innovate in the company's product line or marketing approach. The company…… [Read More]
Managerial Challenge at Facebook
Marketing Problem at Facebook
Application of Project Management to Facebook's Marketing Problem
The Triple Constraint
Gant chart of the Project
Application of Operations Management to Facebook's Marketing Problem
Application of Information Systems Management to Facebook's Marketing Problem
Assignment of the Project Team
Work Breakdown including Critical Path
Facebook is one of the social media platforms that has transformed modern communications and become highly successful and profitable in the process. Throughout its operations, the company has remained successful and adopted suitable business strategies and initiatives. One of these initiatives is the recent initial public offering that was largely successful despite numerous challenges in initial stages. However, several events have taken place in the recent past and contributed to decline in the number of Facebook's users. This decline is a reflection of marketing and advertising problems at the company, which is a…… [Read More]
The first of these was co-designed with Sony, and established the modern layout for laptop computers that has remained popular ever since.
In 1994, Apple revamped its Macintosh line with the introduction of the Power Macintosh, which was based on the PowerPC line of processors developed by IM, Motorola and Apple. Apple's operating system software was adjusted so that most software written for the older processors could run in emulation on the PowerPC series.
After an internal power struggle with new CEO John Sculley in the 1980s, Jobs resigned from Apple and went on to found NeXT Inc., which Apple ultimately bought. This move brought Jobs back to Apple's management. On July 9, 1997, Gil Amelio stepped down as CEO of Apple after overseeing a 12-year record low stock price and crippling financial losses. Jobs stepped in as the interim CEO and began the critical restructuring of the company's product…… [Read More]
Baderman Island Virtual Organization:
Baderman Island is a self-sufficient, all-encompassing resort destination that is surrounded by the shores of the Kelsey iver. This Island is characterized with three different hotels, a number of restaurants, and a comprehensive list of activities to entertain and relax guests. Some of the featured hotels in this island include The Tenney, the Baderman Main Hotel, and Melancon Convention Center and Hotel. Since its inception, Baderman Island has developed to become a premiere relaxation and vacation destination. Given that there are more than 800 acres of wilderness that are yet to be developed, the organization is seeking to enhance its growth and development through a series of plans and projects that are currently underway. Some of these plans include adding extra 18 holes of golf, creation of a buffer area around the botanical gardens, expansion of its oasis spa, enhancing beach area, and improving tennis facilities.…… [Read More]
Building High Performing Organizations
MDM plc is a medium-sized quoted company that is considering investing in a project that would cost €200 million in order to promote its growth and productivity. This investment is under consideration because of the need to transform MDM plc to a high performance organization. Organizational performance is essentially described as the analysis of real output or results against the desired business goals and objectives. High performing organizations are associated with four major capabilities i.e. financial capabilities, operational capabilities, marketing and sales capabilities, and innovation and sustainability capabilities. For MDM plc to enhance its organizational performance, an evaluation of important ratios for profitability and riskiness is important. With regards to investing in the €200 million project, MDM plc should examine different probable measures of financing a project.
atios for Assessing the Profitability of the Company
One of the major ways of promoting the success of the…… [Read More]
That is the beauty of the successful and rising platform established through successful investments; it all becomes quite circular. Then, by reinvesting and refinancing earnings, everything becomes stronger. Just as easily, however, this corporation could have been buried.
1. What is a franchising arrangement? And how is this reflective of business expansion? Moreover, how does this support business growth? From HighBeam Business, these key-terms set the stage from here on out:
MLA: Pondent, Corr S. "About eacquired Franchise ights" (29 December 2010). Highbeam Business: Money. eHow. Demand Media, Inc. Web. 18 March 2011.
About eacquired Franchise ights
A franchising arrangement is a way to expand a company's business without investing a lot of additional money. The franchisee gets the use of an existing business model, or franchise rights, as well as business support, and pays the franchisor a franchise fee in return.
The franchisor could decide to buyback…… [Read More]
This approach is highly congruent with the guidance of marketing experts such as Wheaton (2004) who advises, "There are synergies between different lifestyle sports industries and their media. Corporations make equipment for several lifestyle sports, sometimes under different brand names. Clothing companies like Quiksilver sell to a range of lifestyle sport markets including skating, surfing, windsurfing, snowboarding and have been quick to exploit the potential of emergent and rapidly growing activities like kite-surfing" (2004, p. 10). Because the company also designs and manufactures the core sporting needs for these sporting enthusiasts, it is important to identify defining characteristics of this market. These sports are characterized by a number of features of interest to Quiksilver's and its competitors' marketers with respect to their various core product and accessory lines, including those set forth in Table 2 below.
Defining features of the surf and sports industries
Such…… [Read More]
They include the Investment Corporation, company employees, and institutional investors.
Apart from a handful of firms, the articles provide inadequate or incomplete information in their prospectuses. I can acquire essential data for purposes of my estimation in my research. The magnitude of under-pricing is estimated at different levels in the secondary markets. For all the articles, the degree of under-pricing appears to be high than the degree of average pricing at different intervals. When an IPO is selling as per the premium public information, it implies that there will be a high demand for its shares and initial allotment in the secondary market. Clearly, these articles will be of utter importance in the course of my research study (Quayes & Hasan, 2008).
These articles provide an empirical base for my research in the markets for new IPOs in Tokyo, Shanghai, New York, and London. The articles have used different samples…… [Read More]
What is an Auction-based IPO?
Auction-based IPOs, also called "Dutch auctions" are the offering of shares, where investors bid on an initial public offering before it goes public. In this auction method investors tell the company the number of shares they want and the price they are willing to pay for it. In theory, such auctions set a fair market price reflecting supply and demand, lead to a fairer distribution of shares, and the company also benefits by avoiding large commissions for banks. Auction-based IPOs are different from the traditional IPOs favored by the Wall Street, in which large brokerage houses, and powerful investment banks determine the price of the IPO and who among their list of clients gets shares.
What Prompted Google to Take this oute?
In their IPO letter to prospective shareholders, Google founders Sergey Brinn and Larry Page wrote: "It is important to us to…… [Read More]
Dick and Mac McDonald opened their first restaurant in 1940 in San ernadino, California. These men were among the first to introduce the concept of "fast food," and made dining fun for children. McDonald's went on to enjoy over 60 years of growth, which has only tapered in the last year due to a failure to expand successfully into places such as olivia. Despite these recent setbacks, it is notable that only the third world could thwart McDonald's is a testament to its brand name and its revenue model. There are currently over 28 thousand McDonald's Restaurants in over 120 countries. McDonald's global sales in 2000 were over 40 billion, and the company could boast 16 billion customers that year.
McDonald's success didn't occur in an incremental, measured fashion. The company only really took off in 1954 when a mixer salesman, Ray Kroc, discovered the operation and found a way…… [Read More]
8-15.6-15.6-15.5-15.6-15.6-15.8-16.1 Subtotal pre-1996 154 15.6-15.5-15.5-15.5-15.5-15.5-15.5-15.9 adapted from PriceWatersHouseCoopers 2008)
1996 Vintage Funds Onwards
No of funds to ec
Venture 72 -1.6 -0.6 -1.9 -2.4-8.7-29.7-42.0-86.7 Small MBO* 16 7.3-3.2-1.9-0.3-3.2-1.3-2.6 -14.2 Mid MBO 73-14.9-13.2-9.3-5.9-4.3-3.6-8.0-17.6 Large MBO 1-23.7-21.0-18.0-13.9-14.3-16.5-30.6-25.2 Subtotal 1996 onwards 182 18.9-16.4-13.2-9.4-9.7-1-1.7-19.8-25.9 Grand total all funds
336 17.3-16.0-14.4-13.0-13.6-14.6-16.2-16.4 adapted from PriceWatersHouseCoopers 2008)
Subcategories (All Vintages)
No of funds to ec
UK 252 14.6-14.4-14.0-13.6-14.1-14.5-15.4-16.2 Non-UK 84-20.2-1-7.9-14.9-11.8-12.6-15.1-18.7-17.5 Pan-European 77-21.6-19.7-17.4-14.0-14.9-16.9-20.9-20.4 Technology 95-0.1-1.0-0.1-0.9-7.4-10.7-12.1-12.8 Non-Technology 241 18.7-17.3-15.7-14.2-14.5-15.3-17.0-17.3
Includes development capital adapted from PriceWatersHouseCoopers 2008)
No of to ec
No of funds to ec
1980-84-13 9.5-9.5-9.5-9.5-9.5-9.5-9.5-9.5 1985-89-68-13.8-13.8-13.8-13.8-13.8-13.8-13.8-1-3.8 1990 13-11.3-11.3-11.1-11.1-11.1-11.6-11.5-11.8 1991 14-23.4-23.4-23.4-23.3-23.3-23.3-23.3-23.7 1992 7-20.3-20.3-20.3-20.3-20.2-20.1-20.0-19.7 1993 10-15.3-15.3-14.8-14.0-14.6-14.6-14.6-16.0 1994 20-34.3-34.3-34.4-34.4-34.3-34.3-34.9-36.9 1995 9-23.1-22.2-21.9-21.9-21.8-22.8-25.7-32.1 1996 15-18.7-18.7-18.6-1-8.5-19.0-20.1-22.0-26.3 1997 25-15.6-14.7-14.9-14.3-14.3-13.7-17.6 n/a 1998 16-12.5-12.2-10.8-10.6-9.3-6.3 n/a n/a 1999 28-15.8-8.8-6.2-1.5 -2.0 n/a n/a n/a 2000 29-16.7-14.9-8.7-4.8 n/a n/a n/a / a 2001 29-29. 1-28.3-23.4 n/a n/a n/a n/a n/a 2002 20-32. 1-23.4* 22.2* n/a n/a n/a n/a n/a Total 336…… [Read More]