can you explain this article to me? is it just that private-equity firms are looking at IPOs as a way to exit their investments - so what - going public to get $$$ right (so like, liquidity)? i'm so confused. why am i in a business class ahhhh.

i also don't really get the relationship between the credit market and the IPO market and restoration time. so if the credit market gets better first than private-equity companies looking for an exit strategy would rather do some type of merger and acquisitions deal and try to get bought out by a bigger person?? why? i mean why would that be better than going public?

and this might be the most retarded question of all but when an private equity firm does a public offering or goes public or whatever - what happens? i mean i've read articles where firms that chose IPOs as exit strategies were still run essentially the same - the private investors were just rewarded with special big dividends and there weren't shareholder meetings or anything - so why would a regular person want to buy stock in a company like that? potential?

oh whyyy am i retarded.

Quote :

"Cautiously, Private Equity Looks for Exits Offerings Increase as Stock Markets Pick Up; Coming Up -- Ancestry.com, InfrastruX Group By LYNN COWAN As private-equity firms test the IPO waters for a way to exit from their investments, one thing is clear: They are treading cautiously in the way they are structuring their deals. Private-equity-backed companies accounted for close to half the initial public offerings launched in busier years such as 2006 and 2007, but when the IPO market effectively closed down in the second half of 2008, all types of deals were shut out. As broader stock gauges have picked up in recent months, so has activity among private-equity IPOs, beginning with Bridgepoint Education Inc. and Rosetta Stone Inc. in April, and more recently, with deals from semiconductor maker Avago Technologies Ltd. and electronic-health-care-claims processor Emdeon Inc. KKR is preparing an initial offering of discount retailer Dollar General, whose Arvada, Colo., store is seen here. Dollar General Dollar General More are expected. Of the 10 IPOs filed in August, five are majority-owned by private-equity shops, according to data from Dealogic. (Data exclude deals raising less than $10 million, companies that refreshed existing filings, real-estate investment trusts and shell companies.) Private-equity-backed offerings in the pipeline include genealogical Web site Ancestry.com and utility-services contractor InfrastruX Group Inc., owned by Spectrum Equity Investors and Tenaska Capital Management, respectively. Kohlberg Kravis Roberts & Co., one of the most acquisitive firms in the buyout boom, is preparing several stock offerings, including one of discount retailer Dollar General Corp. But this year's crop of private-equity-backed IPOs are holding back from some of the more aggressive strategies from the past. No one is trying to flip out of an investment made within the past 12 months, not only because prospective buyers would balk, but also because there haven't been many private-equity-financed purchases in the past year. Gone are the days when the bulk of the money raised went toward a big special dividend to private-equity owners; now, the money is being used to pare debt, redeem preferred stock and for general corporate purposes. "The activity we may be seeing in the future will be largely related to gaining some liquidity through an IPO exit as opposed to paying a dividend," says Kevin O'Mara, a partner in the private-equity practice of the law firm Jones Day. "Private-equity funds that were raised in 2003 and 2004 are getting near the end of their investment period, and they need to exit because money has to start being returned to their investors in the seventh and eighth year." Just because they aren't drawing hefty dividends or flipping for quick profits, private-equity shops aren't exactly leaving the IPO banquet hungry. In every deal this year, at least 40% -- and more often, half -- of the shares sold in the offerings have been from private-equity owners, so those dollars don't go into the company's coffers. And in two cases, private-equity owners have their hands deep in the money that did flow to the companies. All the proceeds due to Bridgepoint were used to redeem convertible preferred stock held by private-equity firm Warburg Pincus, while a chunk of the money raised by Avago flowed to owners KKR and Silver Lake through debt repayments and advisory agreement termination fees. Bankers and market observers say they expect the pace of private-equity-backed debuts to pick up along with the broader IPO market in the latter part of this year, barring any new market or economic meltdowns. However, high interest in IPOs on the part of private-equity shops does depend on another factor: whether the credit market loosens up substantially, which could make mergers and acquisitions appealing options, says Steven E. Siesser, chairman of the specialty-finance group at the law firm of Lowenstein Sandler PC. "It's really going to be a challenge to see which market restores first: Credit or IPOs," Mr. Siesser says. If credit markets come back faster, we'll be seeing more strategic exits compared to IPO exits.""

9/1/2009 12:09:35 AM

this is chit chat


fuck your shit

9/1/2009 12:09:58 AM

well maybe there are some intelligent people up in here late night

9/1/2009 12:11:54 AM

hm. kinda want to buy some dollar general stock when it comes out...

9/1/2009 12:13:31 AM

What is the actual question? That post is all over the place. I assume this is for a business law class? Or are you doing a joint-JD/MBA program like I was looking at.

In any case, I need sleep, but if no one helps by tomorrow when I check TWW, I'll try to help possibly.

[Edited on September 1, 2009 at 12:14 AM. Reason : question in terms of the assignment. the post is vague and rambling.]

9/1/2009 12:14:20 AM

^^i know me too. my cousin works in their corporate office

ANYWAY can anyone help meeeee understand. my brain does not work in a business manner.

^ umm i don't know. the questions i asked

yes business law. i mean it isn't an assignment we're just supposed to read the finance section of the WSJ and i never really understand what i'm reading since i've never taken a business class before. i mean i don't really know if i understand the article i guess i just wanted to make sure i did at least kindof? so maybe someone can explain it in retarded people terms hah.

[Edited on September 1, 2009 at 12:16 AM. Reason : .]

9/1/2009 12:14:26 AM

i hope you post more articles throughout the semester

9/1/2009 12:16:27 AM

haha. i probably will since i don't get anything ever. we had to do math in my class on thursday i was very confused.

well i guess i'll just assume people think the buyout market has peaked and want to sell and peace out of there and take their big money and run.

maybe NYM well help me tomorrow. business makes me feel really, really dumb.

9/1/2009 12:22:55 AM

First of all I'm gonna tell you straight up that I'm not going to read that article and I'm not a business/finance major. But I think I might be able to help you a little bit. There's a good possibility that you know everything already.

Quote :

"is it just that private-equity firms are looking at IPOs as a way to exit their investments - so what - going public to get $$$ right (so like, liquidity)? i'm so confused. why am i in a business class ahhhh."

A private equity firm will usually do an IPO when their business is running very well. If that's the case, their stock price will most likely go up as the public bids up the price. This allows them to borrow more money against the equity of the stock, which in this case is likely worth more than the actual value of the company. If their investments are not liquid, this would allow them some more space for borrowing capital.

Quote :

"i also don't really get the relationship between the credit market and the IPO market and restoration time. so if the credit market gets better first than private-equity companies looking for an exit strategy would rather do some type of merger and acquisitions deal and try to get bought out by a bigger person?? why? i mean why would that be better than going public?"

Generally, when a bigger company buys out a smaller company, they do a share trading type deal where they buy the smaller company at a premium price and in return give them a certain amount of stock. So the value of the stock that the smaller company receives will be worth more than the actual company. This is ideal for the smaller company because then they can either sell the stock right away or keep it as the value increases. Either way, their making out pretty well and is immediate, as opposed to doing an IPO and waiting for their own stock to rise.

Quote :

"and this might be the most retarded question of all but when an private equity firm does a public offering or goes public or whatever - what happens? i mean i've read articles where firms that chose IPOs as exit strategies were still run essentially the same - the private investors were just rewarded with special big dividends and there weren't shareholder meetings or anything - so why would a regular person want to buy stock in a company like that? potential?"

Pretty much. Assuming the company is earning well when the IPO goes down, the stock price should rise (potential/speculation). I don't know too much about the special dividends, but any stock that is rising or giving out high/extraordinary dividends is something a regular person would want to buy supposedly.

Most of this has come from a stock market game/simulation that I've spent a decent amount of time playing. (Lame, I know). If you want to check it out: http://www.roninsoft.com/ The download link is on the right side under Wall Street Raider Financial Simulation. It was developed as a learning tool so if you have a lot stock market stuff in this class this could give you a nice little look from the inside.

9/1/2009 12:26:48 AM

thanks

i get it now. i mean i really understood a lot of that already but i just didn't know if i was actually understanding it. i mean i think i just get scared in this class and see scary financial terms and i'm like "ahhh i don't know what that means" instead of just sitting down and figuring it out

i mean i'm pretty sure like 4 days ago i googled "what is a hedging"

so we can see who is behind on the financial crisis here. its me. whoops.

9/1/2009 12:39:46 AM

i am doing something not fun

why did i take this class?

oh yea, cause i wanted to take mergers and acquisitions. ughhhhhh.

9/30/2009 10:33:54 PM

WHAT IS AN EXECUTIVE EQUITY INCENTIVE IN AN LLC

I HATE MY LIFE!!!

but seriously i'm so confused.

10/12/2009 12:32:17 AM