Standard Price Is Right rules, closest without going over, guesses in by 3:45PM. Continue reading »
Groupon
The barriers to entry into underwriting sexy tech IPOs really shouldn’t be that high. Like, it’s not that hard. And, while much ink is spilled about how IPO underwriters are gatekeepers with a sacred trust to protect the public markets from dodgy companies, no firm has any official status that would give them an advantage in that gatekeeping function (as opposed to). But the top of the league table is pretty much who you’d expect if you weren’t expecting much:
From a public perspective this is maybe a good thing. Despite the lack of any official recognition, there’s something to be said for having IPOs – notionally the riskiest of public securities offerings, though, y’know – be underwritten by big-name long-established firms whose capital and reputation are theoretically on the line if the thing they’re underwriting turns out to be a turd.
From a client perspective it’s also understandable. At this point I could probably place the Groupon IPO from my couch, despite some questions about its valuation, because it’s a household name in a sexy sector and investors are desperate for anything without a 1.0 correlation to Greek bonds. But there will once again come a time when the market cracks and a mortgage REIT heavily exposed to Florida development deals and Chinese forests has to drag its IPO kicking and screaming over the finish line. When that happens, the client will be very happy to be doing a deal with a league table leader who can call up its best clients and say “I know you don’t normally buy IPOs in this particular sector, but remember that time I got you a big allocation on Groupon? Whaddaya say?” If you’re Groupon it now appears that you don’t need that kind of support, but you have to be pretty confident not to worry about that going into a six-month IPO process.
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We anticipate three reactions from people on the road: 1) “This is a great, I gotta get in.” 2) “This is good but, three year-old company…I’m not ready to take that risk.” 3) “I don’t get it. You guys are whacky.” We hope it’s more of the first two. –Jason Child, Groupon CFO, on an employee call to discuss the IPO.
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Hedge Funds
Tech Venture Capital Community Views Hedge Fund Money As Impatient, Unsupportive, Scary, Devil-Esque
By Bess Levin
As those of you’ve been paying very careful attention may have noticed, Wall Street is pretty into tech these days. Morgan Stanley is underwriting every single IPO available, Goldman Sachs has money in Mark Zuckerberg’s poking machine and LinkedIn is making Jim Cramer’s head explode. Hedge funds, however, want more. While Peter Thiel famously invested in Facebook way back when, and Tiger Global has poured cash into a whole bunch of sites, the industry as a whole wants a piece of these companies and not just after they become (alleged) successes.
A handful of hedge funds already had a history of such investments, but the activity has increased recently as investors try to cash in on the surging valuations of Facebook Inc., LinkedIn Corp., Zynga Inc., Groupon Inc. and a smattering of smaller companies…In the past 12 to 18 months, firms including D.E. Shaw & Co., Maverick Capital, Brookside Capital and Tudor Ventures, as well as hedge-fund investor James Pallotta, have joined Tiger in putting more money into promising yet risky tech companies. Starting last summer, Tiger began ramping up its investments in private companies in India, China, Brazil, Russia and other emerging markets. This year alone, it has invested in six Indian start-ups, including consumer electronics retailer LetsBuy.com, online fashion site Exclusively.in, and online bookseller Flipkart…Edward Lampert, the hedge-fund investor who controls Sears Holdings Corp., has become interested in private tech companies too. He recently assigned Daniel Levine, an analyst at his hedge fund, ESL Investments, to look for opportunities.
Sounds great, right? Well it would be except for the fact that some people are apparently too good for hedge fund money. Despite the fact that the firms are willing to throw hundreds of millions at them and open doors to sophisticated investors, these people are “suspicious” and skeptical of what hedge funds want and what their intentions are and whether or not they are literally the devil. Continue reading »
Groupon Inc., seeking to raise $750 million in an initial public offering, asked six more banks to help underwrite the sale, including Barclays Plc and JPMorgan Chase & Co, said two people with knowledge of the situation. Citigroup Inc., Deutsche Bank AG, Bank of America Corp. and Allen & Co. were also offered a role, said the people, who declined to be identified because the decision isn’t public. [Bloomberg]
To make you look stupid. Continue reading »
According to Eric Lefkofsky, you should pay no attention to the $540.2 million the site has lost since 2008. And according to CEO Andrew Mason, you should pay no attention to Lefkofksy. Continue reading »
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