"Hey, I'm from Fidelity Magellan Fund. Mr. Lynch has decided that if the price is $20, we want 1 million shares; if it is $22, we want 800,000 shares; if it is $24, we want 60
Ten thousand shares.”
"I am the New York State Common Retirement Fund, and I want 500,000 shares for $20..."
In the middle of the night before DDH went public, CEO Ed Bastian was sitting in the IPO office of Goldman Sachs, watching the hotline ringing non-stop and the nonstop fax machine spitting out quotes from all over the world.
.
Standing in front of him, constantly reading the fax and learning about the latest bid from the operator, was Rich Bresler, the CFO that DDH Media snatched from Time Warner. This young and promising executive was originally at
He became a partner at Ernst & Young. He later entered the media industry and was engaged in acquisitions of television and radio stations, establishing a strong Wall Street network.
Together with Bastian, he and Goldman Sachs' IPO arm had received very good reviews on the road show and were expected to be about ten times oversubscribed.
There was good feedback from the roadshow. The main reason is of course the high quality of the assets of Ronald's DDH Media, but another reason that cannot be ignored is the impact of Viacom's loss-making acquisition of Paramount Media.
Although Redstone has significantly reduced the value of Viacom and himself this time, the momentum of acquiring Paramount regardless of cost has been interpreted by some Wall Street analysts as the industry's assessment of large media groups.
value increase.
In other words, although this acquisition has devastated the small shareholders of Viacom and Blockbuster, Paramount Media has not become worthless. Coupled with Barry Diller's bid, the final
The acquisition price increased by 50%, which also caused Wall Street to have a new understanding of a newly listed medium-sized media company.
Just after two o'clock in the morning, it is the time for large investment institutions in the United States and even the world to bid for the IPO of DDH Media. The fluctuating ringing of the phone and the non-stop fax machines indicate enthusiasm for this company.
These companies' IPO subscriptions do not have only one price. They quote based on possible prices and quantities. If the listing price is set lower, then more will be bought. If the listing price is set higher, then more will be bought.
less.
There are also repeated games here. If the number of subscribers exceeds the amount released, the price and number of shares may be temporarily changed to allow more subscription institutions to buy high-quality listed stocks.
.
These subscription institutions are mainly divided into several main types: mutual funds, pension funds, insurance funds, hedge funds, and Goldman Sachs' self-operated institutions. The prices they quote are also different. There are wealthy institutions like those managed by Peter Lynch.
There are tiered price quotes like Magellan Fund, and there are also quotes that only give a ceiling price.
These two hours were like a vegetable market. Goldman Sachs employees were constantly accepting various quotes, then quickly sorting them out using software, and then printing them into various tables and charts.
It is convenient for senior people to make the final decisions.
The atmosphere of this bidding is very exciting. With every additional quote and every higher dollar, the bonuses and options of everyone present will continue to increase the number of wealth.
Before you know it, two hours are about to pass. The big whiteboard hanging on the wall is densely packed with quotations and numbers. It makes people’s blood boil. Even the green woolen curtains are illuminated by the light, as if
They are all covered in gold mixed with green light, making one's heart beat faster just by looking at them.
"The chairman is here!"
Suddenly, someone recognized Ronald who had just walked in, followed by his friend Douglas Hansen Jr., the second largest nominal shareholder of DDH and a representative of the old money family of Staten Island.
"How's the situation?" Ronald walked straight to CEO Bastian. In another ten minutes, the quotation time will end, and then it will be the critical time to set the issue price. After that, they will have to negotiate with major companies.
After the institution confirmed it, everyone went to the New York Stock Exchange to hold a press conference, and finally waited to ring the bell for today’s opening.
"It can be said to be the best scenario we expected..." Ed Bastian was all smiles. With this hot quotation, his options were at least 20% higher than his original expectations.
Everyone has raised the price of this kind of media stock. There are also some expectations for growth. Unlike companies with a long history like Paramount, DDH's asset package does not have many assets that have depreciated.
, is expected to continue to generate considerable cash income for listed companies in the next five years.
Among the domestic investment funds, there are Magellan and Counter Trend funds under Fidelity, Vanguard's 500 Index, the Growth Fund of Putnam Group, and several small funds under Putnam Group.
Several major pension funds, including the New York State Common Retirement Fund, the New York Police and Firefighters Retirement Fund, the California Public Employees' Retirement Fund, the California Teachers' Retirement Fund, etc., have all made offers.
There are also two companies that generally do not make activist investments, the Texas Teachers and Civil Servants Retirement Fund also participated in the subscription. Before Ronald came, George Jr. had expressed his feelings to him through someone else. Since George Jr. was preparing to run for public office, he personally
Not participating in this IPO, the couple's personal investment is only to make some reasonable and legal money by investing in the secondary market after the listing.
In addition, insurance companies such as Prudential Financial, MetLife, and New York Life also participated in many subscriptions, but their subscription prices and amounts are more conservative.
The more aggressive ones are hedge funds. Several funds, including Tiger Fund and Soros Fund, have given relatively aggressive quotations. Of course, they have always been like this, and Goldman Sachs does not intend to give them too many quotas. These funds
Usually, they are quickly sold to take profits after listing, which is not very beneficial to the stability of the stock price.
This chapter is not over yet, please click on the next page to continue reading! What is more surprising is that international investment institutions are also very interested in this company. For example, Korea National Pension Service, Hong Kong's HSBC and Yifu Asset Management, etc.
wait.
Although DDH's road show also went to East Asia, the fax sent by the other party contained a limit price order. That is to say, as long as it is below the price they set, no matter how much the price is, all purchases will be made at the issue price.
The shares are really surprising.
This shows that these East Asian subscribers’ evaluation of DDH exceeds that of ordinary investment institutions. Goldman Sachs does not know why they attach so much importance to an American media company. If DDH’s portfolio is not large, they all
One would think that after Sony and Panasonic, the Japanese would invade America's media industry again.
After all calculations, we can now get ten times over-subscription, which is already a very optimistic result in the current stock market environment. It is estimated that after the listing, the stock price will rise appropriately, for example, by 30
Above USD, a reserved profit margin is given to these subscribed funds.
"Zhizhizhi..."
At this moment, the fax machine rang again, and another subscription quotation came through. CFO Rich Bresler rushed over and tore off the first page.
"AIG-American International Group, two million shares, market order...and, God, this is Chairman Greenberg's personal instructions..."
"Hahaha..." Ronald, together with the chairman, received a letter of appointment from a foreign expert. On the plane, Maurice Greenberg joked that he would cooperate with him in the future, but he didn't expect this.
Here it comes.
A market order is the highest compliment for a listed company, which means that no matter what your listing price is, he will buy it at that price. Although this price is rare, in the eyes of Goldman Sachs, what is even more rare is the above Morris.
Greenberg's autograph requires complete trust in the potential of DDH Media.
"Zhizhizhi..."
Several more faxes came in, and this time the quotation was even more surprising than AIG. It was from the Japanese Government Pension Investment Fund and Nomura Investment Fund in Tokyo.
The former is the largest pension investment fund in Japan. It has a lot of money and rarely participates deeply in international IPOs. This time it also came with a market price quotation. It made a large purchase with almost no consideration of the purchase cost.
As for Nomura Investment Fund, in addition to being one of the largest investment institutions in Japan, there are also some funds under it, which are actually the private investments of some wealthy people. They also have market orders with no price limit, as if they are specifically here to support the listing of DDH.
.
"Haha, it's friends from Japan..." Ronald smiled. The last time he and Bannon speculated in Japan were remembered by the bureaucrats of the Ministry of Finance. Coupled with the influence of Dahe Sang, Japan's influence on him
The assessment of this media company is indeed not low.
"Zhizhizhi..."
Finally, there was a quotation from an investment company from Xiangjiang. The number of shares purchased was very small, but the market price was very generous.
"Huh?" CFO Rich Bresler glanced at Ronald in confusion. Such a small order was paired with a market price order. What is the origin of this? Anyway, the subscriptions from East Asia are largely
It was brought about by Mr. Chairman's personal influence. I don't know what the reason was this time.
"Just give them a quota as usual..." Ronald smiled. Anyway, it was through Xiangjiang's investment department, so it doesn't affect anything. Just treat it as a friendly gesture. Maybe they want to be in the international market.
When it comes to investing, learn how to play an IPO and feel that you will definitely not cheat them.
Ring ring ring ring…
After the bell rang, all the quotations had ended. People from the Goldman Sachs investment banking department and DDH Media, headed by Ronald, sat down together and everyone began to discuss the issue price.
"The scale of subscription is very satisfying. Our oversubscription has reached fifteen times. If we had followed our original maximum issue price of US$25, many quotes would have been very disappointing. If we distributed it according to the subscription price curve,
A lot of people can’t get the right shares.”
The final subscription status compiled by people from Goldman Sachs and DDH. If there are more subscriptions than originally expected, generally speaking, investment banks will determine the final share quota obtained by the investment institution based on various principles.
For example, pension funds and mutual funds will get better quotas because they will hold them for a longer period of time. Hedge funds will allocate smaller quotas and they will buy and sell quickly to make short-term profits.
The stability of the stock price is detrimental.
In addition to the market price order, limit order, and ladder bid order, in this order, the share quota is allocated according to everyone's bids in a prioritized manner. Generally speaking, limited stocks are allocated according to the ratio between your bid and the shares.
Of course, such a popular IPO will dissatisfy many bidding institutions. If only one-tenth of the originally expected shares can be purchased, it will offend the investment managers of some institutions.
"Our suggestion is to increase the issue price from US$25 to US$27. Expand the size of the issuance of shares from the original 25 million shares to 28 million shares. With such strong demand and oversubscription, we will also expand the
The number of shares issued and the issue price can ensure that investors who have subscribed 15 times will not feel that they are being neglected."
"Well, in that case..."
Ed Bastian took over the plan. He is also a former CEO of an accounting firm partner and is very good at financial figures.
The adjusted issuance accounted for 28% of the total equity, the issue price was US$27, and the total market value after the opening was US$2.7 billion. The funds raised exceeded the original most optimistic estimate of 630 million US dollars, reaching US$760 million...
Bastian explained to Ronald in detail the good start that the hot IPO had brought to DDH Media, and then asked him to make a decision with a pen.
This chapter is not over yet, please click on the next page to continue reading! Ronald picked up the pen and asked everyone enthusiastically, "Are everyone satisfied now?"
"Satisfied! Perfect! Bravo!" The people present were all people who could earn 10% more through this temporary adjustment plan. They all smiled broadly and applauded desperately.
Ronald signed the pricing plan amidst applause, and then everyone went back to pick up their phones to inform those investors of the latest price.
Looking at the busy office, Ronald looked at his watch. It was already six o'clock in the morning. Ronald looked at little Doug next to him, and the two looked at each other and smiled. As a major shareholder, plus Donna's trust,
In the end, Doug Jr. was represented. When attending the press conference and bell-ringing ceremony, Doug Jr.’s own shares in the original investment also made him a billionaire. The Hansen family became the first
The old money family of Staten Island, which occupied Manhattan, jumped onto the stage...
"Have some breakfast, what do you want to eat?" Ronald smiled and went out with little Doug. They had nothing to do here, they were just waiting for the announcement of the issue price at seven o'clock and the press conference at eight o'clock.
"Cheeseburger...and a can of Coca-Cola...hahaha..."
"Then cheeseburgers and Coke..."
Ronald also laughed. This kind of fast food was originally a food that filmmakers often used to satisfy their hunger when filming. As a person who started his career in movies, it was perfect to eat this kind of food when his company went public.
…
At eight o'clock in the morning, in a conference hall of the New York Stock Exchange, DDH Media's listing press conference officially began.
"This is the Wall Street Journal. Can you elaborate on the company's development strategy for the next five years?"
"Investors report, what do you think of the temporary increase in the issue price and issuance scale of the IPO, and the oversubscription of more than 10 times?"
"New York Times, How will the money raised in the IPO be used? Are there any specific acquisitions or expansion plans?"
“Washington Post, what do you think is your company’s unique advantage compared to other media companies?”
…
CEO Ed Bastian, on behalf of DDH Media, answered questions from financial media reporters one by one.
"Hollywood Reporter, Ronald, as the chairman of a listed media company, will you still direct movies yourself?"
All of a sudden, all the reporters and the company's management focused their attention on this reporter's face. Why did this style of painting suddenly become a Hollywood new film conference?
"I am very happy to answer your question. This is probably one of the few questions that is suitable for me to answer..."
"Hahahaha..." The reporters all laughed. As the chairman of the board, Ronald answered all previous business management questions by the CEO, but he answered an entertainment question very humorously.
"I will continue to direct. There are many directors in Hollywood who are worth more than me (according to the apparent shareholding, Ronald's share is still not as large as Spielberg and George Lucas). I still want to continue directing."
Being able to direct the works I like may give me a greater choice than before when choosing scripts."
"Dangdang..."
When the market opened at 9:30, Ronald, along with Little Doug and CEO Ed Bastian, rang the bronze bell of the exchange. The bell echoed for several seconds, and the exchange below suddenly became human.
There was an uproar, and traders started shouting prices openly like a market.
"27,28,29,30..."
The stock code-named DDH suddenly encountered a large amount of money buying after the market opened. The price rose all the way and soon exceeded thirty US dollars...