Summary: Direct Public Offerings E-Book

BusinessNews Publishing

• Herausgeber: Business Book Summaries
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 34

Veröffentlichungsjahr: 2013

Beschreibung

The must-read summary of Drew Field's book: "Direct Public Offerings: The New Method for Taking Your Company Public".

This complete summary of the ideas from Drew Field's book "Direct Public Offerings" explains how DPOs have now become a viable way for companies to sell stock directly to the public, without the expenses required for traditional IPO processes. In his book, Drew Field shows how Direct Public Offerings deliver significant advantages and opportunities for both investors and companies. By reading the information provided by the author, you will understand what DPOs can do for you and your business, and start making them an integral part of your business plan.

Added-value of this summary:
• Save time
• Understand key concepts
• Expand your business knowledge

To learn more, read "Direct Public Offerings" and find out the benefits of DPOs and why you should never run a business without them.

Leseprobe

Book Presentation: Direct Public Offerings by Drew Field

Summary of Direct Public Offerings (Drew Field)

Book Presentation: Direct Public Offerings by Drew Field

Book Abstract Drew Field

Direct Public Offerings (DPO) have now become a viable way for companies to sell stock directly to the public – without the expense and overheads required by the traditional underwritten IPO process. Further, the DPO offers significant advantages and opportunities to investors – by significantly broadening the number of companies in which they can invest.

The largest pool of capital in the world is in American households. Selling corporate shares into that market has traditionally been left to the securities industry. Today, however, the securities industry earns far greater revenues by acting as merchant bankers than they do in retailing stock to the public. In addition, most investors believe the best IPO investment opportunities are rarely available to the man on the street, and are instead allocated to preferred customers of the investment bankers. A DPO reverses that trend, and places every person on a level playing field.

The message is simple. The money is there for any business, on the best possible terms – at zero interest, free of restrictions on how the business should be run and without any need to ever be repaid. The old, traditional ways of getting that funding are no longer working efficiently. For entrepreneurs today, there is a new way to get new stockholders – through a Direct Public Offering. Don’t start or expand a business without it being an integral part of your plans.

Important Note About This Ebook

This is a summary and not a critique or a review of the book. It does not offer judgment or opinion on the content of the book. This summary may not be organized chapter-wise but is an overview of the main ideas, viewpoints and arguments from the book as a whole. This means that the organization of this summary is not a representation of the book.

Summary of Direct Public Offerings (Drew Field)

1. WHY SO FEW CORPORATIONS DO UNDERWRITTEN PUBLIC OFFERINGS

Main Idea

Historically, the securities industry existed mainly to facilitate the flow of capital from individuals to businesses through share ownership. Today, however, investment bankers and others find greater profits in mergers and acquisitions – rearranging and dismantling – than in selling stock to individual investors.

Supporting Ideas

In 1961, more than 1,000 companies sold shares to the public for the first time in an Initial Public Offering (IPO). In the 1970s, there were never more than 50 IPOs in any one year. In the 1980s, around 150-500 IPOs came to the market every year. In the 1990s, the IPO market peaked at 608 IPOs in 1994. Yet, over the same time period, the amount of capital on deposit at banks by individuals has grown from $60 billion in 1961 to $900 billion in 1988, while total assets of households has grown from $1 trillion to $10 trillion over that same time period.

In other words, the opportunity for individuals to invest discretionary funds into growing entrepreneurial companies have declined – not because of a lack of interest on the part of the public or a lack of funds but because of changes in the investment banking industry.

The changes that have occurred in the investment banking industry are:

Institutions now dominate today’s stock markets.Selling stock (or anything else) to the public is time intensive. By contrast, institutions are run by professionals and have large amounts of capital to invest. Therefore, it makes good business sense for investment bankers to cater to the institutions – at the expense of catering to individuals.The public experience with performance of some previous IPOs was unsatisfactory.Most people believe the post-IPO performance of stocks is rigged, and that many IPOs are over-valued through intensive public relations programs and so forth. There is also a general perception it is nearly impossible to get shares in any really hot IPO – only in the dregs that no institution wanted to pick up.Consolidation in the securities industry means the smaller stockbroker has almost disappeared.