2018-01-08 10:37:00 Mon ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
Spotify considers directly selling its shares to the retail public with no underwriter involvement. The music-streaming company plans a direct list on NYSE in lieu of a hot IPO. This alternative procedure can be cheaper, faster, and less legally risky to the issuer. The issuer may then lose its first-day price run-up in a hot IPO, which seldom benefits anyone apart from the institutional investors who receive an initial allocation of shares. In contrast, most startups file for an IPO through investment banks. These underwriters round up institutional investors to buy the issuer's fresh shares in order to establish a fair market price. Through a promotional roadshow, the underwriters commit to covering these new shares in their due diligence and fair valuation. The underwriters receive a considerable bounty in the order of 3%-5% of the IPO price (e.g. $300 million fee-payment to Alibaba's underwriters).
As cash-rich companies such as Spotify, Uber, and Airbnb have little incentive to raise capital via IPOs, these cash cows prefer to directly list on stock exchanges. Spotify can thus bypass firm commitment on the part of IPO-fee-driven investment banks. Nevertheless, the direct list may expose Spotify to bear raid by short-sellers, little underwriter liability, and less blue-sky transparency. This direct list option may attract more unicorns into the U.S. public stock market.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2023-03-21 11:28:00 Tuesday ET
Barry Eichengreen compares the Great Depression of the 1930s and the Great Recession as historical episodes of economic woes. Barry Eichengreen (2016)
2024-05-27 03:23:34 Monday ET
Stock Synopsis: Life insurers emphasize profit margins over sales growth rates. We review and analyze the recent market share data in the U.S. life insur
2019-04-05 08:25:00 Friday ET
Warren Buffett places his $58 billion stock bets on Apple, American Express, and Goldman Sachs. Berkshire Hathaway owns $18 billion equity stakes in America
2024-03-26 09:30:00 Tuesday ET
Stock Synopsis: ESG value and momentum stock market portfolio strategies Since 2013, we have been delving into the broad topics of ESG (Environmental, So
2017-04-19 17:37:00 Wednesday ET
Apple is now the world's biggest dividend payer with its $13 billion dividend payout and surpasses ExxonMobil's dividend payout record. Despite the
2022-03-05 09:27:00 Saturday ET
Addendum on empirical tests of multi-factor models for asset return prediction Fama and French (2015) propose an empirical five-factor asset pricing mode