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Essay / Research Paper Abstract
This 4 page paper considers choices faced by eBay in the way in which they may undertake an initial public offering for Skype. The potential for the IPO to use a traditional or online auction are considered, looking at the costs and risks and the potential different types of investors which may be attracted. The bibliography cites 3 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEskyIPO.rtf
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Unformatted sample text from the term paper:
separate eBay and Skype, offering Skype for an initial public offering (IPO). However, the way in which this IPO will go ahead is not yet been determined, the question is
whether or not the company should choose a traditional approach, utilizing appropriate refinance house to market and then sell the shares for them, or whether they should follow a strategy
that other Internet companies utilize, such as Google, with the use of an online Dutch auction where potential purchases could bid for the shares (Robicheaux and Herrington, 2007). In a
traditional IPO a firm will approach a brokerage and investment bank, who would then prepare prospectuses in order to offer the shares of the company for sale, distributing the prospectuses
and then gathering the applications along with payment for the shares. The investment bank (or other financial institution) will arrange for underwriting to take place so that if the shares
unsubscribed company is guaranteed a minimum, and charge a fee for providing a service. Part of the problem with the process is the way in which the shares are valued
in a traditional IPO, there is a need to ensure that the shares are sold and that the launch is seen as a success, as well as the need to
maximize revenue, which is led to a balance be achieved way which is often noted, and expected, that IPOs will be undervalued (Muscarella and Vetsuypens, 1989). Therefore, it is possible
that the company may not necessarily get the maximum potential revenue from the IPO, there is also a danger that environmental situations may change outdated processes set at the beginning.
When considering this type of IPO majority of investors are likely to be institutional investors, , such as investment funds and pension funds, making large purchases. One consideration that maybe
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