A less-than-final answer about the Big Bang
It's my national lead, and I can't help wondering if there are not more important issues closer to home, but that's me.
Thought I would be faithful to the $pirit of the post and make this my initial offering this Friday:
"Fidelity seeks a bigger piece of IPO action" by Beth Healy | Globe Staff June 20, 2014
“There is a group of investment banks who control the IPO market. I worked on Wall Street for over 25 years, and I’m one of the guys who built the walls around the cartel.’’
Those are fighting words from a powerful firm that trades billions of dollars in stocks and bonds and does business with the Wall Street banks every day. When Fidelity Investments gets slices of IPOs like Twitter’s to sell to its retail brokerage customers, it is depending on relationships with investment houses in New York for those shares.
Yeah, about Twitter: I don't tweet, I just clip, so I'm looking at the dumping of a pile as the stock quotes and shell game no longer interest me. That's in$ide ba$eball for the elite of Bo$ton, and rightly so. It is who the flag$hip of the region is written of and for. Not complaining, just recognizing not for me because I no longer have the endurance.
What I do recognize is another pump-and-dump scheme to draw money into the stock market which would sag without the Fed printing press propping it up. As the Fed $lows down, they need dough!
So what is it, hashtag# out or something?
Hank Erbe, the head of equity origination at Fidelity Capital Markets, said that Fidelity continues to partner with big IPO underwriters like Goldman Sachs Group and Credit Suisse Group, and that will not change overnight. But the company has been watching with keen interest the populist direction that markets and fund-raising are taking, with programs like Kickstarter helping new products get off the ground by attracting money from small investors.
With all due re$pect, it's a way of fleecing you from your hard-earned dough so it can be poured upward as u$ual.
Typically, IPOs are underwritten by investment banks, which vie for the chance to take the most promising companies public. The companies pay fees of 6 to 7 percent for the bank’s services, which include doing research and placing the shares with large investors, including Fidelity.
Erbe complains that, despite all the changes in finance and technology over the past decade, Wall Street still has a lock on the way stock offerings work.
They went to the trouble of setting up a Federal Reserve $y$tem for it.
“The Internet has changed the way people lead their lives,’’ he said. “But nowhere has technology touched the IPO market. And that is the final frontier.’’
Dah, dah, dah, dah-dah-dah-dah-dah, dah-dah....
Oh, those days seems so far away and so long ago as this blog editor tears up a bit.
What the world could have been, once, when there was a fleeting moment of hope, and what the world has become since.
Broadly speaking, initial stock offerings via the Internet — so-called “electronic IPOs” — are one answer for emerging companies, Erbe said. This week’s conference, called “Innovation in Electronic Capital Formation,’’ tackled the issue, with 200 attendees and another 200 listening remotely, according to Fidelity executives.
Among the speakers was William Hambrecht, the longtime San Francisco investment banker whose current firm, WR Hambrecht + Co., offers “open IPOs,’’ which provide broad public access to stocks that are going public. He famously persuaded Google Inc. to set aside some of its 2004 IPO shares for sale through the public auction method.
It worked, Hambrecht said Thursday, but investment banking firms still wanted to exert control — and protect their 6 percent fees. “The reality was we ended up in a total adversarial relationship, representing the company against the underwriters,’’ he said.
Hambrecht said electronic IPOs can be a less costly alternative for companies going public, instead of a “wedding day” approach, or spending six months preparing for a much-hyped kickoff. For instance, prices can be tested in advance, he said, and changed depending on the response.
He also suggested that companies write their own offering documents, rather than pay lawyers $1 million to draft them.
Yeah, that will get $ome people moving!
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In recent years, Fidelity has taken measures showing its interest in private, emerging companies. It employs researchers who specialize in hot private companies and who develop relationships with the venture capitalists backing them.
That money comes from pensions and endowments, and is often "burned through" even if no product is developed.
Now you know why college costs keep skyrocketing and your pension statement is relatively flat save for the overinflation of the currency. It's actually buying you less these days even as it grows(?).
It has used its large mutual funds to make investments in these firms while they are still private. Two high-profile examples: the social media site Facebook and, most recently, Uber Technologies Inc., the ride-sharing service.
Related: Facebook's IPO Flops
Well, not for everyone.
Taxis Uber Alles
Also see: New lawsuit claims Uber exploits its drivers
I guess I'll be skipping the cab ride this morning.
By investing in private capital rounds for startups, Fidelity also gets to turn those investments into large chunks of shares when those companies go public....
The company requires investors who buy IPO shares to hold them for at least three weeks, so they can’t simply “flip” them for a quick profit and leave the stock in danger of a sharp early decline....
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Just e$tablishing a “beachhead,’’ they tell me.
Let the war begin!
