For The think tank
The assignment is to research key facts about a recent initial public offering – either Alibaba or Box – using sources available on the internet (Wall Street Journal, New York Times, Yahoo Finance, etc.) This will provide a foundation for our discussion of IPOs in class.
The suggested format is to use the following headings and briefly answer the questions which are listed:
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Company description: Briefly (three to four sentences) describe the company and its business.
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IPO price range: Before an IPO occurs, the company and its investment bankers estimate the price at which it will be sold. What was the original price range for this IPO? Was the price range updated? If so, what was the final price range?
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IPO:
– AtwhatpriceweresharessoldtothepublicintheIPO?
– How much money was raised by the company in the IPO? (This is equal to the IPO price times the number of shares which were sold in the IPO.)
– Did the company indicate what it planned to use the money for? Were there indications of whether insiders/early investors sold stock?
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First day stock performance: How did the stock price perform on the first day it traded? How did that compare to the performance of the S&P 500 on that day? (You can get S&P 500 prices on Yahoo Finance by using the ticker symbol ^gspc.)
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Stock performance since first day: How has the stock price performed since the first day of trading? Compare the stock’s closing price on the first day to the closing price on May 1. How did the S&P 500 perform over that same period?
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Value:
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– What value was implied by the IPO price for the total company? (This is equal to the total
number of shares outstanding times the IPO price.)
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– Whatvaluewasimpliedbytheclosingpriceonthefirstdayoftrading?
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– Whatisthevalueimpliedforthetotalcompanybythestock’spriceonMay1?
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Assessment/Outlook: Assume you were a shareholder in the company before the IPO. Would you consider the IPO a success?
Your submission should be a maximum of two pages typed.
