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Public Offering

Public Offering. Wall Street “lingo” IPO underpricing and overpricing IPOs from abroad SEC filings. (last updated 31 Jan 13). "PR Newswire, June  30, 1995, Friday

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Public Offering

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  1. Public Offering Wall Street “lingo” IPO underpricing and overpricing IPOs from abroad SEC filings (last updated 31 Jan 13)

  2. "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that its initial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment  basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill." 

  3. Initial public offering? "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that its initial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment  basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill." 

  4. Initial public offering? Common stock? "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that itsinitial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment  basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill." 

  5. Initial public offering? Common stock? "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that itsinitial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment  basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill."  “Effective”?

  6. Initial public offering? Common stock? "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that itsinitial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment  basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill."  “Effective”? “Green Shoe”?

  7. Initial public offering? Common stock? "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that itsinitial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill."  “Effective”? “Green Shoe”? Firm commitment?

  8. Initial public offering? Common stock? "PR Newswire, June  30, 1995, Friday "THE RATTLESNAKE HOLDING COMPANY, INC. (Nasdaq: RTTL) announced today that itsinitial public offering  of Common Stock commenced on June 29, 1995. STAMFORD, Conn., June 30 The offering covered 1,300,000 shares of Common stock (plus 195,000 additional shares to cover over-allotments) at an initial public offering  price of $5.50 per share.  The offering was underwritten on a  firm commitment basis by Auerbach, Pollak & Richardson, Inc.    "Rattlesnake operates a chain of casual dining restaurants featuring a southwestern theme under the name "Rattlesnake Southwestern Grill."  “Effective”? “Green Shoe”? Firm commitment? Lead underwriter?

  9. Underwriting Methods Documentation

  10. Underwriting methods Investors • Firm-commitment • Best efforts • Dutch auction UW (investment bank) Issuer

  11. Underwriting methods Investors • Firm-commitment Retail firm Retail dept UW UW UW Issuer

  12. Underwriting methods Investors • Best efforts • Straight • Mini-max • All or nothing UW (investment bank) Issuer

  13. Underwriting methods Investors • Dutch auction (sell 1 million shares) Investmentbank Issuer

  14. Underwriting methods Investors • Dutch auction (sell 1 million shares) Investmentbank Issuer

  15. Dutch auction clearing price

  16. Underwriting documentation

  17. Underwriting documentation Investors Retail firm Retail dept UW UW UW Issuer

  18. Underwriting documentation Investors Letter of intent Retail firm Retail dept UW UW UW Issuer

  19. Underwriting documentation Investors Letter of intent Retail firm Housekeeping Retail dept UW UW UW Issuer

  20. Underwriting documentation Investors Letter of intent Retail firm Housekeeping Agreement amongunderwriters Retail dept UW UW UW Issuer

  21. Underwriting documentation Investors Letter of intent Retail firm Housekeeping Agreement amongunderwriters Retail dept UW UW UW Underwriting agreement Issuer

  22. Underwriting documentation Investors Letter of intent Retail firm Housekeeping Agreementamongunderwriters Retail dept UW UW UW Underwriting agreement Issuer Comfort letters Issuer’s counsel

  23. IPO Pricing Underpricing Overpricing

  24. “IPO phenomenon” Market First day of trading (avg = +16.4%) Three years after IPO(avg = -27.4% compared to mkt) IPO

  25. IPO Underpricing and DisclosureJAMES C. SPINDLERUniversity of Southern California Law School (May 2009) Using a unique data set, I find that U.S. IPO prospectus disclosure dramatically affects the degree of first day underpricing of the new issue, consistent with theories of underpricing as caused by informational asymmetry. In particular, a 1 standard deviation increase in positive prospectus disclosure is associated with almost a third reduction in first day underpricing. Further, this may derive from disclosure-related litigation risk: an increase in negative prospectus disclosure is associated with an increase in subsequent IPO-related lawsuits, which suggests that less positive (or more negative) disclosure is a reaction to litigation risk.

  26. “IPO phenomenon” Market First day of trading (avg = +16.4%) Three years after IPO(avg = -27.4% compared to mkt) IPO Why underpricing? (UWs as gatekeepers)

  27. “IPO phenomenon” Market First day of trading (avg = +16.4%) Three years after IPO(avg = -27.4% compared to mkt) Why overpricing? (ECMH) IPO

  28. American Depositary Receipts

  29. Reuters Financial ServiceJuly 31, 1996, Wednesday GRUPO RADIO CENTRO <RCN> OFFERING PRICED AT $ 7/ADS NEW YORK, JULY 31     Grupo Radio Centro  SA <RC.MX> said Wednesday the  public offering  of 3.7 million of its American Depositary Shares (ADSs) was priced at $ 7.00 per ADS.   The shares were being offered in the United States and elsewhere outside Mexico by the company and certain selling shareholders.The selling shareholders include a Mexican trust controlled by the Aguirre family, the company's controlling shareholders, and Clemente Serna, a director of the company.   Of the total shares offered, the company will sell about 1.5 million ADSs, the trust will sell 1.1 million, and Serna will offer 1.1 million. Each ADS represents nine of the company's CPOs, or Participation Certificates.   The company said it plans to use its proceeds from the deal to repay a substantial portion of its debt.    Bear Stearns and BT Securities are the managing underwriters of the offering, which is set to close August 2.

  30. Fraud (tort of deceit) • Material misrepresentation • Intentional (defendant aware of truth) • Reliance (plaintiff relies reasonably) • Misrepresentation is cause of loss • Damages

  31. Fraud (tort of deceit) • Material misrepresentation • Intentional (defendant aware of truth) • Reliance (plaintiff relies reasonably) • Misrepresentation is cause of loss • Damages What is a “prospectus”?

  32. What is registration statement?Netflix, Inc. (Form S-1)

  33. Integrated disclosure Reg S-K Reg S-X ’33 Act Registration Statement [S-1, S-3] ’34 Act Periodic Reports [10-K, 10Q, 8-K] ’34 Act Proxy Statements [14A]

  34. The end

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