投资学 (2).ppt

Margin trading and short selling Regulation and ethics issues associated with
security transactions
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LEARNING OBJECTIVES
Have considerable insight as to how securities are traded on both the primary and secondary markets
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Primary vs. Secondary Security Sales
Primary:when firms need to raise capital they may choose to sell(or
float) new securities. These new issues of stocks, bonds, or other securities typically are marketed in the primary market.
to the general investing public that can then be traded on the secondary market. Once the SEC has commented on the registration statement and a preliminary prospectus has been distributed to interested investors, the investment bankers organize road shows in which they travel around the country to publicize the imminent offering. Shares of IPOs are located to investors in part based on the strength of each investor’s expressed interest in the offering.
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Investment Banking Arrangements
Underwritten vs. “Best Efforts”
the issue of whether the issuing firm or the investment banker bears the risk that the issue will be sold at the offering price. In an underwriting arrangement the investment bankers purchase the securities from the issuing company and then resell them to the public. In the best-efforts agreement the investment banker agrees to help the firm sell the issue to the public but not actually purchase the securities.
Understand the mechanics, risk, and calculations involved in both margin trading and short selling.
Begin to understand some of the implications, ambiguities, and complexities of insider trading and the regulations concerning these issues.
Shelf registration (Rule 415, since 1982):An important
innovation in the method of issuing securities was introduced in 1982, when the SEC approved Rule 415, which allows firms to register securities and gradually sell them to the public for two years after the initial registration. Because the securities are already registered, they can be sold on short notice with little additional paperwork.
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Chapter 3
How Securities Are Traded
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CHAPTER OVERVIEW
How securities are traded on both the primary and secondary markets
Organized exchange and over the counter activities
3-10 Figure 3.1 Relationship Among a Firm Issuing Securities, the Underwriters and the Public
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Public Offerings
Public offerings: A public offering is an issue of stock or bonds sold
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3-12 Figure 3.2 A Tombstone Advertisement
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Public Offerings
Initial Public Offerings (IPOs)
- Evidence of underpricing: IPOs commonly are underpriced compared to the price at which they could be marketed. Such underpricing is reflected in price jumps on the date when the first traded in public security markets.
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Stage of Business Development
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3-S5 &P 500 Index ’Enterprises Assets and Market Value (1988-1998)
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- Underwritten: firm commitment on proceeds to the issuing firm.
- Best Efforts: no firm commitment.
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Investment Banking Arrangements
Negotiated vs. Competitive Bid
Issues can be arranged on either a competitive or negotiated offering.
Negotiation is far more common. Besides being compensated by the spread between the purchase price and the public offering price, an investment banker may receive shares of common stock or other securities of the firm. While virtually all stock offerings and corporate bond offerings are done on a negotiated basis, many municipal offerings are completed on a competitive bid basis.
- Existing owner sells to another party. - Issuing firm doesn’t receive proceeds and is not directly
involved.
Public offerings of both stocks and bonds typically are marketed by investment bankers, who in this role are called underwriters. More than one investment banker usually markets the securities.
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Primary vs. Secondary Security Sales
Secondary:purchase and sale of already issued securities among
private investors take a place in the secondary market. The secondary markets consist of (1) national and local securities exchanges,(2) the over-the-counter market, and (3) direct trading between two parties.
- New issue
- Key factor: issuer receives the proceeds from the sale.
There are two types of primary market issues of common stock. Initial public offerings, or IPOs, are stocks issued by a formerly privately owned company selling stocks to the public for the first time. Second new issues are offered by companies that already have floated equity. We also have distinguish between two types of primary market issues: a public offering, which is an issue of stock or bonds sold to the general investing public that can then be traded on the secondary market; and a private placement, which is an issue that is sold to a few wealthy or institutional investors at most, and, in the case of bonds, is generally held to maturity.
- Negotiated: issuing firm negotiates terms with investment banker.
- Competitive bid: issuer structures the offering and secures bids.
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