Chuys Article: Why would a company want to serve as Chuy's investment banker? What benefits could the investment baker receive?
The investment baker would receive a fee--generally 7% of the offer price--from Chuys. In addition, they could enhance their reputation for serving firms like Chuys.
Who were Chuys investment bankers? why was there more than one involved?
3 investment banking firms were involved: Jefferies, Baird and Morgan Keegan. The firms collectively formed an investment banking syndicate to share responsibilities and spread the risk of the issue among the 3 firms
Did the investment bankers underwrite the issue or work on a best efforts basis? what is the difference?
They worked as underwriters, meaning they guaranteed that Chuys would receive a predetermined price per share (likely the offer price minus 7%) Had they worked on a best efforts basis, they would have given no such guarantee to Chuys
Why did Chuys have to "file documents with the Securities and Exchange Commission" prior to the IPO? What are the SECs responsibilities.
As reported by your textbook, "Sales of new securities, such as stocks and bonds, as well as operations in the secondar markets, are regulated by the SEC..." Any company that wants to issue securities to the public must provide "financial, legal, and tech
Prior to Chuys filing with the SEC, was it possible to know whether the company was profitable? Why or why not?
Before starting the process to go public, Chuys was a private firm. Private companies do not have to reveal their financial info to the public.
How does Chuys plan to use the money it receives during the IPO?
The article stated that Chuys intended to use the money to pay debts
On which stock exchange will Chuys stock be listed? Why doyou suppose it chose that particular exchange?
Chuys will be listed on the Nasdaq. Either Chuys managers determined that the company could not meet the listing requirements of the NYSE or they preferred the Nasdaq, or both. the Nasdaq has developed the reputation of being a leading edge exchange, wher
One of the articles stated that shares of Chuys stock were sold at $13 during the IPO, and that the price per share was $24.36 last January. Why did the price rise? Who or what caused the rise to occur?
The increase in price was caused by supply and demand. Secondary Market investors wanted to buy the stock and were willing to pay more than $13 per share in order to do so.
Did the stock price rise on the primary or secondary market?
the shares were purchased at the offer price by the IPO/primary market investors on the primary market. The shares were then sold by these same IPO/Primary market investors to secondary investors on the secondary market. The rise in price occurred on the
Who benefitted when the stock price rose?
The benefit was received by the IPO/primary investors who sold their stock to secondary investors. (in addition, the brokers of both the buyers and the sellers benefitted by receiving a commission on each buy/sell transaction)
Why is chuys conducting a secondary public offering? Who will benefit?
the secondary offering will allow insiders (perhaps the founders, early employees and venture capital investors) to sell their stock to the public at a profit. these insiders will receive the cash when the stock is sold.
Will the secondary offering occur in the primary or secondary market?
Primary. It will be the first time these particular shares of stock will be offered to the public. The cash will be oging to insiders within the company.
Article "Hugh Hefner" What is the difference b/w a private company and a public company?
A private company is owned by private parties. It is not required to reveal its financial info to the public. A company that has gone "public" is partially or fully owned by members of the public. Public companies are required to publish their financial r
Assume you own 100 shares of Playboy Stock and you reject Mr. Hefners offer of $6.15 per share. All of the other shareholders accept his offer. What will become of your shares?
If all of the rest of the stockholders allow the company to "go private" there will no longer be an active market of investors to purchase your stock. If everyone else accepts Hef's offer, you will still own your shares, but there will no longer be an act