COMMERCE 3FA3 Lecture Notes - Lecture 9: Investment Banking, Canadian Imperial Bank Of Commerce, Bid Price

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 3FA3
• Professor: Anwar Husain

Document Summary

Going public: list sha(cid:396)es o(cid:374) sto(cid:272)k e(cid:454)(cid:272)ha(cid:374)ge (cid:894)ny e, t x, na daq (cid:895, whe(cid:374) (cid:455)ou"(cid:396)e a s(cid:373)all (cid:272)o(cid:373)pa(cid:374)(cid:455) (cid:455)ou do(cid:374)"t ha(cid:448)e a lot of e(cid:395)uit(cid:455) optio(cid:374)s so (cid:455)ou go pu(cid:271)li(cid:272) Pros: access to more equity, sets a market price for your company, gives existing shareholders (friends and family, venture capitalists) the ability to sell. How do you go public: hire an investment bank. Will value company and help you sell shares. In 1987, wood gundy (now bought over by cibc) issued bp shares. Priced @ per share; this is what bp is going to sell it for. To give wood gundy a commission they would sell shares to them for per share. Largest single day stock market crash since the great depression (falls by 1/3) But wood gundy had just bought these shares for so they just lost millions of dollars.