Trendsetter HBS Case Analysis

Under liquidation, the term sheet stipulates that the Series E investors is entitled to claim its initial investment of $10.75 million plus any accrued but unpaid dividend. Any proceeds after this claim will then be distributed to all common and Series E Preferred shareholders on an as-converted pro-rata basis. This double dipping means that RSC will not only recover its initial investment of $5 millions, but also enjoys the convertible benefits.

As for the combination of cash and new shares, shareholders can take part of their money

3. They charged a higher than fair price in the Secondary Market. They sold the issue slowly in order to maintain the premium.

In a situation where the investors are very certain that company A’s cash flow will be closer to what their value expectations will be. The result of their actions in trusting company A will drive the stock prices up in the company. As a result, company A stocks will definitely be higher than company B.

Common Stock issued by Plyer in 2015 = $ 75,000 - $ 50,000 = $

Analyst , on average , viewed the company not as much appealing at the lower price. On the other hand, back in the end of August 2000, analyst were

2. How should Bengier prepare to negotiate an offer price with the underwriters? What is an appropriate price? Should he be concerned about the IPO pricing patterns in case Exhibit 9?

Market value proportions of: Debt = $1,147,200 / $4,897,200 = 23.4% Pref. Share = $1,250,000 / $4,897,200 = 25.5% Common equity = $2,500,000 / $4,897,200 = 51.1%

their right to receive cash at precisely the time that Arley's stock is low, which is also when the firm

The intrinsic value of Facebook stock was very difficult to find, since the company is relatively new and has been growing at an extreme rate. Based on the most recent sale of Facebook stock via a private transaction the per share price was $44 in March. However, based on the DCF analysis by professor Aswath Damodaran the intrinsic value of a single Facebook share would be $32.44. The problem is whenever using DCF analysis; the analysis is very sensitive to all assumptions uses, which were plenty in the case of Facebook. The price talk from underwriters varied immensely within the time from of February when the Red Herring was filed, all the way to May. At the very beginning, price talks were anywhere from $20 – mid $30’s. They were set to offer 337,415,352 shares. As the broader market continued in bullish trend and momentum for the Facebook IPO became greater. Price talks now shifted to $28-$35 range. Knowing that demand for the stock was said to be growing it was noted that many IPO are priced conservative to leave room for a pop on the first day of trading. On May 11 CNBC made a statement along the lines that demand was much greater than supply for the stock. Shortly after on May 14, the price talks had now moved to $34-$38 range and now offering 421,233,615 shares, the additional shares were all of insiders. This would set the companies valuation at

Endeca Technologies is a software company that established by Steve Papa on September 4th 2001. In the case, the company is currently looking for a Series C round funding to reduce the expected pre-money valuation multiple times because of the NASDAQ had fallen. In the end, the company got a rough pre-money valuation of $25M. At this time, there are two different term sheets that each of them contains some pros and cons putting in front of Papa to let him choose. Overall, Papa should choose the first term sheet because the benefits in that term sheet are more than the second term sheet, and at the same time it has less cons.

The key difference is the offering price. Papa told Ampersand that they could only make room for them if, Ampersand gave Endeca a term sheet that offered to lead an alternate deal at a significantly higher price by the day of the board meeting. Otherwise, it would be unfair to the insiders who had been extremely supportive throughout the entire process. And the insiders had really supported when Endeca needed it. If the insiders have worked very well and shares a common vision, it also is likely to involve a very important potential customer. So Ampersand had to offer a higher price to become

of outstanding shares) + (short-term debt + long-term debt + capitalized leases + preferred stock - cash on hand)

Dividends are subjected to higher tax rate compare to capital gain increased due to share buy-back. This discourages shareholders from desire to receive high dividends in place of higher capital gain as share values increase. A comparison is made below between the proposed capital structure and dividend policy.

Baosteel and Posco : Each company agreedto invest US125 million to acquire a stake in the other, with this stake being less than 0,5 %