Steve is the founder of Jefferson & Co. Recently, the firm decided to issue an IPO...
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Steve is the founder of Jefferson & Co. Recently, the firm decided to issue an IPO with Steve retaining 30 percent ownership of the firm. The IPO agreement contained both a Green Shoe provision and a 6-month lockup agreement. Steve's cost basis per share is $15 The offering price for the IPO was $16. On the first day of trading, the market price per share rose to $28.20 and closed for the day at $25.60 Now, six months after the IPO release, the stock is valued at $15.40 a share Explain who benefited the most during the lockup period, an outside investor or Steve. Steve is the founder of Jefferson & Co. Recently, the firm decided to issue an IPO with Steve retaining 30 percent ownership of the firm. The IPO agreement contained both a Green Shoe provision and a 6-month lockup agreement. Steve's cost basis per share is $15 The offering price for the IPO was $16. On the first day of trading, the market price per share rose to $28.20 and closed for the day at $25.60 Now, six months after the IPO release, the stock is valued at $15.40 a share Explain who benefited the most during the lockup period, an outside investor or Steve.
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A green shoe provision is a clause in an underwriting agreement that allows the underwriter to sell more shares than initially planned by the issuer i... View the full answer
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
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