#underpriced

[teaboot]

Important discovery this morning

(It's grapefruit)

[newstech24]

David Zaslav thinks HBO Max is ‘manner underpriced’

Everybody’s favourite CEO, Warner Bros. Discovery head David Zaslav, thinks HBO Max is ripe for a value hike. Talking on the Goldman Sachs Communacopia and Know-how Convention (doesn’t that sound like a enjoyable time?) Zaslav argued that his firm’s premium output can command a premium value. “The truth that that is high quality — and that’s true throughout our firm, movement image, TV…

David Zaslav thinks HBO Max is ‘manner underpriced’

[2067xenon]

bruh y my Grailed listing get 65 likes in 6 hours

[remahankopi-blog]

IPO in A Bear Market: A Reversal Strategy?

Initial Public Offering (IPO) is a momentous decision for a firm’s management, as it serves as a strategy for expansion using the fund raised from the external investor (Chemmanur and Fulghieri, 1999). Aiming to optimise the outcome, firms usually decide to issue the shares when market sentiments lean to optimistic side (Brau and Fawcett, 2006).

However, the Indonesian’s IPO market has illustrated an odd case recently, by showing an exponential growth in the period of recession. This positive trend, as we might presume, only raised a lesser amount of capital since the issued shares were underpriced due to the sluggish market. So, why did the firms decide entering market when it only provided the company with a low equity value?

First, underpriced IPO could serve as a long-term strategy, particularly for the high-growth firms that want to attract the investor, signalling that the cost of underpricing does not affect their superior growth (Welch,1989). If they issued a tiny fraction of shares in IPO and then sell a greater portion of the shares at the more favourable Secondary Offering Equity (SOE), they might gain a large amount of capital (Boulton and Campbell, 2016). A higher price at an SOE could compensate firms for the intentionally low IPO price (Welch,1989).

Secondly, Banerjee et al. (2016) stated that high-growth firms could still obtain its optimal value by going public when economic uncertainty is high and issue underpriced shares. This high performance of IPO then followed by low-growth firms that usually come in a wave, and forming a “Hot Issue Market”.

Besides, for firms with the need for larger funding, debt is becoming too expensive (Brau and Fawcett, 2006: 408), especially in the economic downturn. In Indonesia’s case, the Central Bank (BI) has risen the BI 7-Day Repo Rates by 1.50 bp in 2018, responding to the Federal Fund Reserve interest policy (BI, 2018). Therefore, by choosing IPO, they would not need to bear the additional burden of higher fixed payment of interest throughout the debt period.

Furthermore, despite the massive withdrawal of foreign investor funds, the IPO market could still attract local investors who have superior market knowledge. As they are more familiarised with the local economy and industry, they might be more optimistic that the firms would potentially grow regardless of the overall stock market falling. Considering the local investors' sentiment, firms would confidently issue their shares in IPO since the underpriced price seems more appealing to this potential buyers.

In brief, firms would not take the overall market uncertainty as a hurdle to issuing their shares on IPO. Even though it drives to the underpricing of equity, they can use it instead as a signalling strategy to attract the investors.

References:

Banerjee, S., Güçbilmez, U., & Pawlina, G. (2016). Leaders and followers in hot IPO markets. Journal of Corporate Finance, 37, 309.

Bank Indonesia, Siaran Pers. Available at: https://www.bi.go.id/id/ruang-media/siaran-pers/Default.aspx  Accessed 02 October 2018.

Boulton, & Campbell. (2016). Managerial confidence and initial public offerings. Journal of Corporate Finance, 37(C), 375-392.

Brau, J., & Fawcett, S. (2006). Initial Public Offerings: An Analysis of Theory and Practice. Journal of Finance, 61(1), 399-436.

Chemmanur, & He. (2011). IPO waves, product market competition, and the going public decision: Theory and evidence. Journal of Financial Economics, 101(2), 382-412

Welch, I. (1989). Seasoned Offerings, Imitation Costs, and the Underpricing of Initial Public Offerings. Journal of Finance, 44(2), 421-449.

“Where IPOs Are on Fire, This Stock Jumped 2,200% in Three Months”. Available at: https://www.bloomberg.com/news/articles/2018-09-27/a-2-200-gainer-is-just-one-product-of-indonesia-s-ipo-craze  Accessed 30 September 2018.

[cryptobitnews]

At $6,500, Bitcoin Prices are Under-Priced

At $6,500, Bitcoin Prices are Under-Priced

A combination of over-the-tops Bitcoin price predictions by Tim Draper and favorable developments in the crypto-verse could cement our previous Bitcoin price forecasts. Further strengthening this position is news that Morgan Stanley plans on creating their Bitcoin derivatives. Coincidentally, and more positive for Bitcoin and other cryptos, more hedge funds are looking to funnel their capital…

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[samdamp]

#damp&timbersurvey #underpriced#hugebuilding#barnsleyisbrill #sheffieldissupper #rotherhamiswonderful #atsocialmediarepost #kprs #yorkshire #london #englandismycity (at Barnsley)