Hertz Ipo Case Analysis

We also know that Louis was contemplating a possible IPO exit strategy before the end of the holding period term. To estimate a multiple for this IPO exit, we need to look at the Price/Earnings ratio for Dollarama. Using the same methodology as above, we compared Dollarama to the same group of companies and computed the average P/E ratio for the set, see Exhibit 6a. We will consider the values for the year 2005 and will take a multiple of 24.6 for an eventual IPO exit.

million shares of common stock had been repurchased on the open market by Marriott Corporation

The bond principal repayment will be $6.25 million annually. The cash dividends will be $7.5 million annually on additional stock.

The stock market has increased from 1.896 in ’86 to 4.789 in ’95 thus creating an incentive for DLJ to offer an IPO. Strategy involved being the IPO allowed employees to exchange their compensation plans for shares and options in DLJ thus giving them an incentive to stay with the company. There were also many advantages and disadvantages related to DLJ going public. Advantages included DLJ increasing liquidity and allowing founders to harvest their wealth, permitting founders to diversify, facilitated raising new corporate cash, established value for the firm, and increasing the potential markets. Disadvantages included the cost of reporting, new disclosure requirements, self-dealings, a possibility of inactive markets reducing price, the firm losing some of its control, and a higher degree of investor relations had to be maintained.

Currently Ms. Deveroux, the founder of the company, holds almost all of the originally issued shares, except for 30,000 shares that she sold to her son for $20.00 per share, the estimated fair market value of the shares at the time they were sold to the son.

The focus of this paper is to examine and research the financing issues that an organization must face when going public. The team has selected Chipotle Mexican Grill, Inc. as the organization which has had an initial public offering in the last three years. The learning team will address registration, disclosure, and compliance issues and cost of issuance. In addition, the team will examine the impact on ownership control and return as well as the source and application of funds.

3. At what price would you recommend that Rosetta Stone shares be sold?Rosetta Stone: Pricing the 2009 IPO

The management of JetBlue and its underwriters can also price the IPO using valuation multiples. JetBlue can employ the most current comparable data of the most appropriate competitors in terms of value in the airline industry. Valuation multiples that can be employed include, but are not limited to P/E multiples, EBIT multiples, EBITDA multiples. In this scenario, I choose to use Southwest airlines and Ryanair as the major benchmarks, because they are both considered as major low –fare airlines, and are key competitors in the United States and Europe. Nevertheless, I believe the P/E ratio is the stronger valuation tool to determine the true value of a firm. Using this method we come up with a share price of $19.32 for Southwest

Weaknesses—ICOS had no marketing skills, new comer into the market, no market share, no brand recognition, no safety reputation established yet, not a self-sufficient biotech company at the time

This case gives comprehensive coverage of a firm’s decision to start an initial public offering but also to go through the process of going public. TRX is a company managing travel-and-data processing activities for its clients. Its target market has significant transaction volume in travel agencies, travel suppliers, large corporation and credit-card issuer. Regarding its service offerings, it focuses on transaction processing, data integration and customer care. Its fortune tied to the overall health of travel industry. TRX generates a lot of revenue but less profit. Trip Davis, Chief Executive Officer of TRX, Inc. decided it was time to raise capital in order to fund the growth of the company. His main focus was to accomplish a strategic recapitalization of TRX. This case gives a brief history about several events from the company’s incorporation in 1999 through the completion of an IPO in September 2005. The main goal is to raise capital but there is also a consideration of another reason for going public. In November 1999, they tried to go public but the IPO was never finalized. After the failed IPO, Trip Davis and TRX president decided to focus on strategic investors in order to raise $20 million convertible into equity at $11 per share. In 2004, he believed that Sabre, Inc. one of the largest strategic investors was not working for the best interest of the company. He took into consideration three possible capital raising options: IPO, private placement of equity, or

1991 public stock offering had been sufficient to meet its financing needs. As of 2012, the capital

(1) According to the case, global IPO activity during the first quarter of 2012 fell to $14.3 billion, which was dramatically down from $46.6 billion during the first quarter of 2011. In addition, we can see in Exhibit 5 that IPO activity in US have dropped sharply since the second quarter of 2011. Number of deals dropped from 383 in the second quarter of 2011 to 157 in the first quarter of 2012.

Group Case: JetBlue IPO Valuation
Finance 6806, Fall 2014

Abrar Khayyat
Rajesh Maraj
Veronica Paez

November 10, 2014

ITT’s value has changed a lot over the recent events. Prior to any offer when ITT’s stock was trading at 43 dollars, the stand-alone value of its equity was 16.4 billion dollars. With the 55-dollar offer to ITT, the company’s value went up to approximately 21 billion. After the offer, the stock was trading at $63.50, which gave the total equity a value of 24.2 billion dollars.

This is the twelfth H-share issue on the HKEX. Total 1,080 million “H” shares would be offered and the total market capitalization is HK$1,575 million.