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Essay / Research Paper Abstract
This 5 page paper answers 4 questions set by the student, looking at whether a Skype IPO should adopt a tradition or an online issue, looks at the type of investors each auction type may attract, the lessons that may be learned from the Google and the MorningStar IPO and the risks and costs associated with each auction type. The bibliography cites 8 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEskypeIPO2.rtf
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Unformatted sample text from the term paper:
undertake an IPO there may need to be consideration given to the type of IPO that will be undertaken. To approaches that could be adopted, a traditional approach, where the
organization publishes a prospectus and polices is to potential investors, in the way that many other firms have made the IPO over the last few decades (Howells and Bain,. 2007).
Alternatively a new form of tall for IPOs is emerging; that of the online Dutch auction, where potential investors are able to bid for shares in the firm may wish
to purchase (Robicheaux and Herrington, 2007). A traditional IPO was the organization work with investment bank, or other financial institution, who will underwrite the shares to ensure that all shares
offered in the IPO are sold, by guaranteeing that they will purchase them for a minimum price, in return for a fee for their services. However, the utilization of a
traditional approach has a number of drawbacks, there is the need to set the price in advance, which often results in the underpricing of a company, which results in lost
revenues for the company. As the IPO is likely to have the aim of maximizing revenue, compromises may need to be made, and by setting the price in advance there
are also additional dangers; such is the potential for macro environmental influences to impact on the way that the valuation is perceived by the market (Muscarella and Vetsuypens, 1989). It
may also be noted that a traditional IPO, with printing and distribution of prospectuses, and the bureaucratic processes of collecting and assessing purchase requests the traditional IPO process can be
both time-consuming and costly. The alternative is the use of an online Dutch auction, this may not be attractive for many companies, but as a core competency of eBay is
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