The Naked Truth: Examining Prevailing Practices in Short Sales and the Resultant Voter Disenfranchisement
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Initial Public Offerings
November 2017 Initial Public Offerings An Issuer’s Guide (US Edition) Contents INTRODUCTION 1 What Are the Potential Benefits of Conducting an IPO? 1 What Are the Potential Costs and Other Potential Downsides of Conducting an IPO? 1 Is Your Company Ready for an IPO? 2 GETTING READY 3 Are Changes Needed in the Company’s Capital Structure or Relationships with Its Key Stockholders or Other Related Parties? 3 What Is the Right Corporate Governance Structure for the Company Post-IPO? 5 Are the Company’s Existing Financial Statements Suitable? 6 Are the Company’s Pre-IPO Equity Awards Problematic? 6 How Should Investor Relations Be Handled? 7 Which Securities Exchange to List On? 8 OFFER STRUCTURE 9 Offer Size 9 Primary vs. Secondary Shares 9 Allocation—Institutional vs. Retail 9 KEY DOCUMENTS 11 Registration Statement 11 Form 8-A – Exchange Act Registration Statement 19 Underwriting Agreement 20 Lock-Up Agreements 21 Legal Opinions and Negative Assurance Letters 22 Comfort Letters 22 Engagement Letter with the Underwriters 23 KEY PARTIES 24 Issuer 24 Selling Stockholders 24 Management of the Issuer 24 Auditors 24 Underwriters 24 Legal Advisers 25 Other Parties 25 i Initial Public Offerings THE IPO PROCESS 26 Organizational or “Kick-Off” Meeting 26 The Due Diligence Review 26 Drafting Responsibility and Drafting Sessions 27 Filing with the SEC, FINRA, a Securities Exchange and the State Securities Commissions 27 SEC Review 29 Book-Building and Roadshow 30 Price Determination 30 Allocation and Settlement or Closing 31 Publicity Considerations -
Shares, Dividends, and Stock Splits
Shares, Dividends, and Stock Splits Authorized Shares – The total number of shares that a corporation can legally sell. Issued Shares – Shares that a corporation sold at any time in the past, even if some of were later reacquired. Treasury Shares – Shares that a corporation previously sold, later reacquired, and still holds. Outstanding Shares – Shares currently owned by investors. These are the only shares that pay dividends and give holders the right to vote for the board of directors. Example: The charter of November, Inc. authorizes the issuance of 125,000 shares of common stock. In total, the company has sold 48,000 shares over the years, but 10,000 were later bought back and are still held by the corporation. How many shares does the corporation have outstanding? 38,000 outstanding shares. This amount is calculated by subtracting the 10,000 shares of treasury stock from the 48,000 issued shares. Example: The charter of October, Inc. authorizes the issuance of 200,000 shares of common stock. In total, the company has sold 90,000 shares over the years, but 9,000 were later bought back and are still held by the corporation. How many shares does the corporation have outstanding? 81,000 outstanding shares. This amount is calculated by subtracting the 9,000 shares of treasury stock from the 90,000 issued shares. Copyright 2021 – Kei G. Gauthier, CPA, MSTax, Longmeadow, MA – All rights reserved. orchardguides.com Cash Dividend Prerequisites – Before a corporation can distribute a cash dividend, 1. the company must have retained earnings of at least as much as the dividend, 2. -
Japan to Normalize Short-Selling Regulations
lakyara vol.164 Japan to normalize short-selling regulations Sadakazu Osaki 10. May. 2013 Japan to normalize short-selling regulations vol.164 Executive Summary Japan's Financial Services Agency has unveiled plans to rescind the emergency short-selling restrictions imposed during the 2008 financial crisis and replace them with revised permanent regulations. Its proposed revisions are timely and sensible. They should help to improve market liquidity and price formation. Sadakazu Osaki Head of Research Center for Strategic Management and Innovation Emergency short-selling restrictions have remained in effect in Japan In March 2013, Japan's Financial Services Agency (FSA) released a draft of revised short-selling regulations. In Japan, short-selling restrictions were tightened as an emergency measure in response to the market turmoil triggered by Lehman Brothers' September 2008 collapse. These emergency restrictions are still in effect, having been extended 12 times. With the recently released revised regulations slated to take effect in November, regulation of short-selling in Japanese markets is set to finally return to normal. Short selling is an investment technique whereby an investor borrows from a third party securities that he does not currently own and sells them in the aim of repurchasing them later at a lower price. When a security is sold short, its market price reflects the investment opinion of investors that do not own the security in the cash market. Short selling also enhances market liquidity by increasing sell orders. It thus fulfills a legitimate economic function but it can also trigger steep price declines if certain stocks are heavily sold short within a short timeframe. -
2018 ICI Fact Book
2018 Investment Company Fact Book A Review of Trends and Activities in the Investment Company Industry 58th edition www.icifactbook.org 2017 Facts at a Glance Total net assets of worldwide regulated open-end funds* $49.3 trillion United States $22.1 trillion Europe $17.7 trillion Asia-Pacific $6.5 trillion Rest of the world $2.9 trillion US-registered investment company total net assets $22.5 trillion Mutual funds $18.7 trillion Exchange-traded funds $3.4 trillion Closed-end funds $275 billion Unit investment trusts $85 billion US-registered investment companies’ share of: US corporate equity 31% US and foreign corporate bonds 20% US Treasury and government agency securities 13% US municipal securities 25% Commercial paper 25% US household ownership of US-registered investment companies Number of households owning funds 57.3 million Number of individuals owning funds 101.9 million Percentage of households owning funds 45.4% Median mutual fund assets of mutual fund–owning households $120,000 Median number of mutual funds owned among mutual fund–owning households 3 US retirement market Total retirement market assets $28.2 trillion Percentage of households with tax-advantaged retirement savings 61% IRA and DC plan assets invested in mutual funds $8.8 trillion * Regulated open-end funds include mutual funds, exchange-traded funds (ETFs), and institutional funds. Note: Components may not add to the total because of rounding. 2018 Investment Company Fact Book 2018 Investment Company Fact Book A Review of Trends and Activities in the Investment Company Industry 58th edition www.icifactbook.org The Investment Company Institute (ICI) is the leading association representing regulated funds globally, including mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the United States, and similar funds offered to investors in jurisdictions worldwide. -
Technological Revolutions and Speculative Finance: Evidence from the British Bicycle Mania
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Quinn, William Working Paper Technological revolutions and speculative finance: Evidence from the British Bicycle Mania QUCEH Working Paper Series, No. 2016-06 Provided in Cooperation with: Queen's University Centre for Economic History (QUCEH), Queen's University Belfast Suggested Citation: Quinn, William (2016) : Technological revolutions and speculative finance: Evidence from the British Bicycle Mania, QUCEH Working Paper Series, No. 2016-06, Queen's University Centre for Economic History (QUCEH), Belfast This Version is available at: http://hdl.handle.net/10419/148345 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend -
Initial Public Offering Allocations, Price Support, and Secondary Investors
Working Paper No. 2/2011 Initial Public Offering Allocations, January 2011 Price Support, and Secondary Revised March 2015 Investors Sturla Lyngnes Fjesme © Sturla Lyngnes Fjesme 2015. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission, provided that full credit, including © notice, is given to the source. This paper can be downloaded without charge from the CCGR website http://www.bi.edu/ccgr INITIAL PUBLIC OFFERING ALLOCATIONS, PRICE SUPPORT, AND SECONDARY INVESTORS Sturla Lyngnes Fjesme* The University of Melbourne, 198 Berkeley Street, Melbourne, 3010, Victoria, Australia, Telephone: +61-3-9035-6354, Fax: +61-3-8344-6914, Email: [email protected] March 2015 Forthcoming, Journal of Financial and Quantitative Analysis Abstract Tying Initial Public Offering (IPO) allocations to after-listing purchases of other IPO shares, as a form of price support, has generated much theoretical interest and media attention. Price support is price manipulation and can reduce secondary investor return. Obtaining data to investigate price support has in the past proven to be difficult. We document that price support is harming secondary investor return using new data from the Oslo Stock Exchange. We also show that investors who engage in price support are allocated more future oversubscribed allocations while harmed secondary investors significantly reduce their future participation in the secondary market. JEL classification: G24; G28 Keywords: IPO allocations; Laddering; Price -
Characteristics Which Predict Naked Short Selling
Journal of Finance and Accountancy Volume 21 Over-the-counter delivery failures: Characteristics which predict naked short selling Paul Ziegler University of Mary Hardin-Baylor Chris Neuenschwander Anderson University ABSTRACT This research deals with the impact of naked short selling on small firms whose stock is traded “over the counter”. Virtually all research into naked short selling has been conducted using data taken exclusively from the major exchanges. Existing research continues to focus on major exchanges even as regulators stress that small firms, in particular those trading over-the- counter, are the most vulnerable to manipulation. Using publically available information, this study has found that several variables including the average daily trading volume, the number of shares in float, and a firm’s market capitalization can be used to identify firms which might be subject to a higher level of naked short selling as identified by post-trade delivery failures. Keywords: Naked short selling, delivery failure, Over-the-Counter Copyright statement: Authors retain the copyright to the manuscripts published in AABRI journals. Please see the AABRI Copyright Policy at http://www.aabri.com/copyright.html Over the counter, Page 1 Journal of Finance and Accountancy Volume 21 INTRODUCTION This research was conducted to discover if directly observable firm characteristics for stocks which trade over-the-counter can be used to predict the level of naked short selling. Generally speaking, stock traded directly between broker/dealers rather than via a formal exchange are termed “over-the-counter” or OTC. Often these firms are small and do not meet the listing requirements of a formal exchange, such as trading volume, market capitalization, or meeting required reporting standards. -
Initial Public Offering Allocations
Initial Public Offering Allocations by Sturla Lyngnes Fjesme A dissertation submitted to BI Norwegian Business School for the degree of PhD PhD specialization: Financial Economics Series of Dissertations 9/2011 BI Norwegian Business School Sturla Lyngnes Fjesme Initial Public Offering Allocations © Sturla Lyngnes Fjesme 2011 Series of Dissertations 9/2011 ISBN: 978-82-8247-029-2 ISSN: 1502-2099 BI Norwegian Business School N-0442 Oslo Phone: +47 4641 0000 www.bi.no Printing: Nordberg Trykk The dissertation may be downloaded or ordered from our website www.bi.no/en/Research/Research-Publications/ Abstract Stock exchanges have rules on the minimum equity level and the minimum number of shareholders that are required to list publicly. Most private companies that want to list publicly must issue equity to be able to meet these minimum requirements. Most companies that list on the Oslo stock exchange (OSE) are restricted to selling shares in an IPO to a large group of dispersed investors or in a negotiated private placement to a small group of specialized investors. Initial equity offerings have high expected returns and this makes them very popular investments. Ritter (2003) and Jenkinson and Jones (2004) argue that there are three views on how shares are allocated in the IPO setting. First, is the academic view based on Benveniste and Spindt (1989). In this view investment banks allocate IPO shares to informed investors in return for true valuation and demand information. Informed investors are allocated shares because they help to price the issue. Second, is the pitchbook view where investment banks allocate shares to institutional investors that are likely to hold shares in the long run. -
Transcript of Securities Lending and Short Sale Roundtable
210 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION 2 3 4 SECURITIES LENDING AND 5 SHORT SALE ROUNDTABLE 6 7 8 PAGES: 210 through 330 9 PLACE: U.S. Securities and Exchange Commission 10 100 F Street, N.E. 11 Washington, D.C. 12 DATE: Wednesday, September 30, 2009 13 14 15 16 The above-entitled matter came on for hearing, 17 pursuant to notice, at 9:33 a.m. 18 19 20 21 22 23 24 Diversified Reporting Services, Inc. 25 (202) 467-9200 211 1 P R O C E E D I N G S 2 CHAIRMAN SCHAPIRO: Good morning. Welcome today to 3 day two of the Securities and Exchange Commission's 4 Securities Lending and Short Sale Roundtable, which will 5 focus on short sale issues. 6 First, on behalf of the Commission, let me thank 7 all of you who've agreed to participate today. Our 8 consideration of these important short selling issues will be 9 enhanced by what I expect will be informative and interesting 10 comments, insights, and recommendations by our panelists. 11 During my tenure as Chairman, the issue of short 12 selling has been the subject of numerous inquiries, 13 suggestions and expressions of concern to the Commission. We 14 know that the practice of short selling evokes strong 15 opinions from both its supporters and detractors. I have 16 made it a priority to evaluate the issue of short selling 17 regulation and ensure that any future policies in this area 18 are the result of a deliberate and thoughtful process, which 19 is why we're here today. -
ASX Announcement 2 October 2019
ASX Announcement 2 October 2019 ASX Code: SEA NASDAQ: SNDE Ground Floor, 28 Greenhill Road, Wayville, South Australia 5067 ACN 112 202 883 Telephone: +61 8 8274 2128 Facsimile: +61 8 8132 0766 www.sundanceenergy.com.au Sundance Energy Australia Limited ABN 76 112 202 883 Not for release to US wire services General Manager The Company Announcements Office Australian Securities Exchange SUNDANCE RE-DOMICILIATION: SCHEME BOOKLET REGISTERED WITH ASIC Sundance Energy Australia Limited (ASX: SEA) (NASDAQ: SNDE) (the “Company” or “Sundance”) is pleased to announce that the Australian Securities and Investments Commission (“ASIC”) has registered the Scheme Booklet in relation to the Company's proposed re-domiciliation from Australia to the United States via a Scheme of Arrangement (the “Scheme”), under which a newly formed US corporation (“Holdco”) will become the ultimate parent company of the Sundance group of companies following the implementation of the Scheme. A full copy of the Scheme Booklet is attached to this announcement. The Scheme Booklet includes the Notice of Scheme Meeting and an Independent Expert's Report prepared by KPMG Financial Advisory Services (Australia) Pty Ltd, which concludes that, in their opinion, the Scheme is in the best interests of Sundance shareholders. The Directors of Sundance continue to unanimously recommend that Sundance shareholders vote in favour of the Scheme and intend to vote Sundance shares in their control in favour of the Scheme, in the absence of a superior proposal and subject to an Independent Expert continuing to conclude that the Scheme is in the best interests of Sundance shareholders. Despatch of Scheme Booklet and proxy form A full copy of the Scheme Booklet, which includes the Notice of Scheme Meeting and the Independent Expert's Report, and proxy form will be sent to Sundance shareholders on or about 10 October 2019. -
The Global Dilemma in Short Selling Regulation: IOSCO's Information Disclosure Proposals and the Potential for Regulatory Arbitrage Eleanora Zlotnikova
Brooklyn Journal of International Law Volume 35 Issue 3 SYMPOSIUM: New Paradigms for Financial Article 12 Regulation in the United States and the European Union 2010 The Global Dilemma in Short Selling Regulation: IOSCO's Information Disclosure Proposals and the Potential for Regulatory Arbitrage Eleanora Zlotnikova Follow this and additional works at: https://brooklynworks.brooklaw.edu/bjil Recommended Citation Eleanora Zlotnikova, The Global Dilemma in Short Selling Regulation: IOSCO's Information Disclosure Proposals and the Potential for Regulatory Arbitrage, 35 Brook. J. Int'l L. (2010). Available at: https://brooklynworks.brooklaw.edu/bjil/vol35/iss3/12 This Note is brought to you for free and open access by the Law Journals at BrooklynWorks. It has been accepted for inclusion in Brooklyn Journal of International Law by an authorized editor of BrooklynWorks. THE GLOBAL DILEMMA IN SHORT SELLING REGULATION: IOSCO’S INFORMATION DISCLOSURE PROPOSALS AND THE POTENTIAL FOR REGULATORY ARBITRAGE INTRODUCTION he tumultuous events leading up to the financial crisis in the fall of T2008 resulted in the rapid enactment of global securities rules and regulations that were designed to limit, curb, or outright ban short selling activity. Undoubtedly, Credit Default Swaps1 played a critical role in corroding the global economy by providing insurance on risky mortgage bonds and encouraging reckless behavior during the housing bubble.2 However, according to many regulatory authorities, short sellers greatly exacerbated global economic turmoil, driving -
The Guide to Securities Lending
3&"$)#&:0/%&91&$5"5*0/4 An Introduction to Securities Lending First Canadian Edition An Introduction to $IPPTFTFDVSJUJFTMFOEJOHTFSWJDFTXJUIBO Securities Lending JOUFSOBUJPOBMSFBDIBOEBEFUBJMFEGPDVT Mark C. Faulkner, Managing Director, Spitalfields Advisors Spitalfields Managing Director, Mark C. Faulkner, First Canadian Edition 5SVTUFECZNPSFUIBOCPSSPXFSTXPSMEXJEFJOHMPCBMNBSLFUT QMVTUIF64 BOE$BOBEB $*#$.FMMPOJTDPNNJUUFEUPQSPWJEJOHVOSJWBMMFETFDVSJUJFTMFOEJOH TFSWJDFTUP$BOBEJBOJOTUJUVUJPOBMJOWFTUPST8FMFWFSBHFOFBSMZZFBSTPG EFBMFSBOEUSBEJOHFYQFSJFODFUPIFMQDMJFOUTBDIJFWFIJHIFSSFUVSOTXJUIPVU Mark C. Faulkner, Managing Director DPNQSPNJTJOHBTTFUTFDVSJUZ 0VSTUSBUFHZJTUPNBYJNJ[FSFUVSOTBOEDPOUSPMSJTLCZGPDVTJOHJOUFOUMZPOUIF Spitalfields Advisors TUSVDUVSFBOEEFUBJMTPGFBDIMPBO5IBUJTXIZXFPGGFSBMFOEJOHQSPHSBNUIBUJT USBOTQBSFOU SJTLDPOUSPMMFEBOEEPFTOPUJNQFEFZPVSGVOETUSBEJOHBOEWBMVBUJPO QSPDFTT4PZPVDBOFYDFFEFYQFDUBUJPOT ■ (MPCBM$VTUPEZ ■ 4FDVSJUJFT-FOEJOH ■ 0VUTPVSDJOH ■ 8PSLCFODI ■ #FOFmU1BZNFOUT ■ 'PSFJHO&YDIBOHF &OBCMJOH:PVUP 'PDVTPO:PVS8PSME XXXDJCDNFMMPODPN XXXXPSLCFODIDJCDNFMMPODPN $*#$.FMMPO(MPCBM4FDVSJUJFT4FSWJDFT$PNQBOZJTBMJDFOTFEVTFSPGUIF$*#$BOE.FMMPOUSBEFNBSLT ______________________________ An Introduction to Securities Lending First Canadian Edition Mark C. Faulkner Spitalfields Advisors Limited 155 Commercial Street London E1 6BJ United Kingdom Published in Canada First published, 2006 © Mark C. Faulkner, 2006 First Edition, 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted,