The I.P.O. pipeline in the United States is filling up as companies once afraid of braving the capital markets are now lining up to for initial public offerings. A fair number of these companies, especially in the financial industry, are looking to spin off businesses at lucrative prices.
The drought in I.P.O.’s reached its peak earlier last year during the financial crisis, with weeks and months going by without one offering hitting the market. Companies feared that the volatility and uncertainty in the financial markets meant that any offering, no matter how strong, would probably get hammered. Read More »
Frenzied bargain hunters who descended on the Tavern on the Green tag sale on Friday hardly entertained hopes of landing the $180,000 leaded-glass ceiling, as it was long gone. And they knew the $75,000 stained-glass peacock was but a memory.
No, the hundreds of memento seekers swarming the bankrupt restaurant in Central Park knew that all the really pricey stuff had been gaveled away in mid-January, during the $3.5 million, three-day auction of about 25,000 items.
But Friday was the absolute, final, last-chance, all-day sale, at the capacious red-canopied entryway at Warner LeRoy Place — the official designation of the West 67th Street extension to Tavern’s front door from Central Park West, bearing the name of the showman who reinvented the restaurant in 1976. Read More »
Cameron Lester and Mike Kwatinetz of Azure Capital Partners examine why start-up companies need to be time-efficient as well as capital-efficient.
In the world of start-ups, capital efficiency is a factor in determining how much entrepreneurs and investors realize on their invested time and capital. It is the ability of a business to reach positive cash flow at scale while consuming an acceptable amount of invested capital. It is important to limit shareholder dilution to entrepreneurs and early investors — the more capital raised, generally the less of the business the entrepreneur and the early venture capitalists will own.
Moreover, the greater the capital efficiency of a business, the better the probability that the company will be acquired or financed at attractive terms (or both), since acquiring companies and venture capitalists pay a premium for capital efficiency. Therefore, it is central to a company’s financial planning, board meetings and presentations to investors. Read More »
Agence France PresseLawrence H. Summers, left, with Charlie Rose at the World Economic Forum. Mr. Summers maintained the pressure on banks to accept greater regulation.
The Obama administration finally weighed in on Friday at the World Economic Forum, as Lawrence H. Summers, director of the National Economic Council, criticized banks that are resisting regulation even as they dispense lucrative bonuses to their executives.
Mr. Summers criticized financial institutions that are opposing a proposal by President Obama to tax bank liabilities and use the money to insure against future crises. The banks insist that paying big bonuses has no effect on their ability to lend, but the tax would, Mr. Summers told a Davos audience.
Government aid to banks preserved half a trillion dollars in market value that wouldn’t exist otherwise, said Mr. Summers, who is the highest-ranking Obama aide in Davos. “The notion that a fee that costs single-digit billions per year is an impossibility, is something I have a hard time to accept,” he said. Read More »
Sheila Bair, the head of the Federal Deposit Insurance Corporation, said on Friday that proposed proprietary trading limits are “very positive,” but said they would not have necessarily reined in risk-taking at the institutions that required huge bailouts.
President Obama last week proposed banning financial institutions with commercial banking operations from engaging in proprietary trading operations that are for their own profit, not for their clients’.
The proposal is intended to prevent banks from using insured deposits to bankroll their own risky bets. Read More »
BlackRock said Friday that it had hired a former Goldman Sachs banker, Kendrick R. Wilson, to be a vice chairman and help support the firm’s client relations as the firm solidifies its position as one of the world’s largest asset managers. Mr. Wilson’s large Rolodex could help BlackRock’s win new clients as well as help it gain a louder voice in Washington.
Mr. Wilson has served as vice chairman of investment banking at Goldman, where he oversaw a myriad of mergers including the sale of the mortgage lender Countrywide Financial to Bank of America in early 2008 and a $7 billion cash infusion for National City, according to Bloomberg News. In August 2008, Mr. Wilson joined his former boss, Henry M. Paulson Jr., as an adviser at the Treasury Department to assist in crafting the government’s response to the financial crisis. Read More »
We can’t stress this enough: Washington is the dominant topic at the World Economic Forum in Davos, Switzerland this year. Between the panels and at the parties, political and business leaders from around the world keep asking whether or not the Obama administration can pull off its ambitious initiatives.
Davos Diary’s Andrew Ross Sorkin spoke on Friday with CNBC’s Becky Quick and Time International’s Michael Elliott about Washington’s attempts at financial regulatory reform. The three weighed in on the populist atmosphere in the United States, and whether that would inhibit the Obama administration as it seeks an overhaul of how banks are overseen.
The financial markets are returning to measurable health and consequently private equity firms are now doing deals more frequently, even those particularly hurt. Apollo Management, scarred by the Huntsman/Hexion acquisition, has a pending acquisition of Cedar Fair, and TPG, which posted a $1.35 billion loss after its investment in Washington Mutual, is acquiring IMS Health. About a week ago, Lone Star Fundsagreed to acquireLodgian in a deal valued at $270 million.
The Lone Star acquisition is particularly noteworthy. In August 2007, Lone Star was the first significant private equity firm to attempt to terminate a pending acquisition. As the credit markets began to freeze, Lone Star invoked the material adverse change clause in its acquisition agreement. Lone Star’s act set off a litigation battle that ended with a compromise and a completed deal. Read More »
Even with the lower celebrity wattage of this year’s World Economic Forum, there are still important political and business leaders wandering around the ski resort that is Davos, Switzerland this week.
And protecting them requires tight security, as the snipers shown here demonstrate.
That’s beyond the tight cordon around the part of town where the Forum’s main panels are held. (Unlike in years past, laptop computer are no longer allowed in the main part of the gathering, and Davos security has cracked down on vehicle permits.
Bain Capital said Friday that it has invested $12 million in Edgar Online, a publicly traded data services company that helps businesses prepare regulatory filings in a new format that will be mandatory by 2012.
As private equity firms slowly recover from the financial crisis, which had clamped down on the debt they need to make their deals, some are trying to make investments that don’t rely heavily on leverage. Among these transactions are public investments in private equity, known as PIPEs. Read More »
Michael Pagano, a finance professor at Villanova, argues that the Volcker Rule resembles another attempt to turn back progress — namely, the Luddite movement of nearly 200 years ago.
Like many of us, I have looked on in disbelief and dismay as the financial crisis and nascent recovery unfolded over the last two and a half years. Given the severity of this crisis and the excesses that caused it, I am open to hearing prudent ways we can do things differently that can help us avoid a repeat of the recent financial and economic turmoil.
But I am concerned that the Volcker Rule, as President Obama’s financial regulatory plan is known, might be taking us down an alley to a dead end where we wind up boxed in a tight corner without much room to maneuver. Read More »
The annual lunch hosted by Ukrainian powerbroker and philanthropist Viktor Pinchuk in Davos has often been a bellwether for the tangled politics of the huge country of 46 million sandwiched between Russia and Europe.
Friday’s was no exception given that the second round of presidential elections falls on Feb. 7. Mr. Pinchuk opened the proceedings with a spoof movie on the Brangelina hit ”Mr. and Mrs. Smith” — where Brad Pitt and Angelina Jolie first fell in love — entitled ”Mr. and Mrs. Y,” referring to the two contenders, Viktor F. Yanukovich and Yulia Tymoshenko.
Mr. Pinchuk had promised moderator Chrystia Freeland, The Financial Times’ editor in the United States who is of Ukrainian origin, that he wanted to make Ukraine’s confusing politics ‘’sexy.” Read More »
Steven D. Black, the executive chairman of JPMorgan Chase’s investment bank, was named a vice chairman of the firm on Thursday, as part of a plan to give more responsibility to the investment banking head, James E. Staley.
In his new role, Mr. Black will continue reporting to Jamie Dimon, JPMorgan’s chief executive, and will play a more client-focused role. The move will give Mr. Staley, a potential candidate to eventually succeed Mr. Dimon, more responsibility for running the firm’s investment bank after becoming its chief executive in September. Read More »
After The Wall Street Journal reported that banks were doling out other financial perks to their employees to ease the toll taken by the slimmer bonuses, Gawker got busy investigating Goldman Sachs’s lending practices.
One of the options that banks, including Goldman, have explored to loosen the squeeze are personal loans and mortgages to cash-strapped bankers, The Journal said. Read More »
Full coverage of the insider trading case against Raj Rajaratnam, the hedge fund billionaire accused of masterminding a wide-ranging insider trading network, and others accused of helping in the schemes. More>>
The Deal Professor
A blog-within-a-blog that looks at mergers, private equity and corporate governance through a legal lens, written by Steven M. Davidoff, a professor at the University of Connecticut School of Law and a former lawyer at Shearman & Sterling.