Euronext anticipated its IPO value to be more than $2.4 Billion this year

Posted on June 11, 2014June 16, 2014 by admin

BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

Euronext’s initial public offering looks like a tough sell. The firm is seeking a valuation of 1.3 billion euros to 1.8 billion euros when it floats later this month. Anchor investors have a vested interest in backing the issue. But for other buyers, it is a leap of faith.

The IntercontinentalExchange Group is selling down its holding in the unit after inheriting the business through its purchase of NYSE Euronext last year.

The NYSE Euronext cash markets operations.

The IntercontinentalExchange Group is selling down its holding in the unit after inheriting the business through its purchase of NYSE Euronext last year.

Some of the I.P.O. shares have already been allocated. Cornerstone investors, mainly banks, are to buy a third of the shares at a slight discount to the I.P.O. price, in return for a three-year lockup. As users, their involvement makes sense.

Ten percent of the offering is set aside for retail investors, with another 2 percent set aside for other institutions. That may add some needed tension to the process.

Euronext’s pitch is that it will benefit from European economic recovery, a global shift from bonds to stocks, and increased capital markets activity as European banks scale back lending. It also wants to diversify away from plain-vanilla equity trading into derivatives. As a result, the group expects to achieve average annual revenue growth of 5 percent, and margins on earnings before interest, taxes, depreciation and amortization of 45 percent.

Those targets may be more conservative than some peers. But they look a stretch given recent performance.

Revenue fell 11 percent in 2012 and 3 percent in 2013. The London Stock Exchange increased revenue in both years. First-quarter revenue in the current year also fell from a year earlier. Annual Ebitda margins were last above 45 percent in 2011. The forthcoming Financial Transactions Tax, and a possibly secular reduction in trading activity, could restrict any upturn in volumes.

The full article can be found at NYT DealBook.

Broker Dealers Battle To Manage Tech Guru Billions: BrokerDealer.com Blog

Posted on June 11, 2014 by admin

Aka “It can be good to be a Wall Street broker-dealer…”

Brokerdealer.com blog update courtesy of WSJ and reporter Randall Smith

Chester Higgins Jr./The New York Times.Thorne Perkin, a wealth adviser, said the young tech group was not to be ignored.

When Microsoft went public in 1986, its chief executive and largest shareholder, Bill Gates, wound up with a broker at Goldman Sachs, the Wall Street firm that had led the company’s initial public offering.

The San Francisco broker, William Hobi, was so excited to have Mr. Gates as a client that he put a vanity license plate on his Porsche for a few years with the letters MSFT, the trading symbol for the company’s stock.

Times may have changed, but technology billionaires still set the engines racing among Silicon Valley brokers. Social media I.P.O.s, including LinkedIn, Facebook and Twitter, and acquisitions like Facebook’s planned $18 billion purchase of WhatsApp have created more than a dozen billionaires, by one count of Forbes magazine data.

Competition to handle their money is intense. “Every day I get a connection request from a wealth manager on LinkedIn,” said Michael Cagney, the founder and chief executive of Social Finance, or SoFi, an online student-loan platform in San Francisco that might go public in the next year or two. Mr. Cagney sold another financial software company, Finaplex, in 2007 and runs a hedge fund.

For the full story from the WSJ, please click here.

Alibaba’s Silence Isn’t Golden For its I.P.O

Posted on June 11, 2014June 11, 2014 by admin

Brokerdealer.com blog extract below courtesy of June 10 WSJ Aaron Back reporting.

Jack Ma, executive chairman of Alibaba. European Pressphoto Agency

As Alibaba Group prepares for the bright lights of Broadway, it is keeping potential investors in the dark. There is yet time to illuminate things.

The Chinese online-shopping giant is likely to release an updated regulatory filing soon in preparation for an initial public offering in New York, expected to raise more than $20 billion. A pre-IPO document released in May left gaping holes around Alibaba’s business and who controls it.

It seems a bare minimum to identify the more than two dozen partners who will effectively control Alibaba via special rights to appoint a majority of board members. The nature of these partners’ business relationships with Alibaba also should be known. It was a big oversight that the initial filing omitted this information. The Wall Street Journal has reported that the names of the partners will be included in the updated filing.

In addition, investors have complained that Alibaba didn’t break down results for its two moneymaking retail sites, Taobao and Tmall. Last month’s filing emphasized the importance of the Tmall business in the mix of the two. Faster Tmall growth means more revenue per item shipped. A higher Tmall contribution also would bode well for the transition to mobile devices, where it is harder to sell ads.

BrokerDealer Credit Suisse Back in the IPO Business

Posted on June 11, 2014 by admin

Brokerdealer.com/blog news extract below courtesy of June 10 WSJ and reporters Telis Demis and Evelyn Rusi

The chinos are gone. So is the sprawling Silicon Valley hub.

But more than a decade after its fall from the peak of the dot-com-banking business, Credit Suisse Group AG CSGN.VX -0.33% is at the helm of some of the sector’s biggest deals.

The bank is one of the lead managers of the expected $20 billion-plus initial public offering for Alibaba Group Holding Ltd., the Chinese online shopping and e-commerce giant.

Credit Suisse also helped lead IPOs for Weibo Corp. WB +1.39% , which operates a Twitter TWTR +2.61% -like service, and online cosmetics retailer Jumei International Holding Ltd. JMEI +0.82% , earlier this year.

Credit Suisse’s climb back in tech banking began with a Starbucks SBUX -0.77% -fueled brainstorming session in 2010 between Jim Amine, the firm’s global head of investment banking, and David Wah, global head of technology banking Continue reading →

UK-based Financial Technology Start-Up Scores With London Bankers

Posted on June 10, 2014 by admin

BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

The British capital is staking a claim as a global leader for financial technology start-ups.

Andrew Testa for The New York TimesTransferWise, which offers foreign exchange transfers without large bank fees, is one of the companies making up London’s growing financial technology start-up scene.

On Monday, TransferWise, one of the city’s most prominent financial technology companies, said it had raised $25 million from a range of investors, including Peter Thiel, a co-founder of PayPal, and the British billionaire Richard Branson.

Started by two Estonian friends in 2011, TransferWise uses peer-to-peer technology that allows individuals around the world to swap currencies without incurring large bank transfer fees.

The company says it has processed roughly 1 billion pounds, or $1.7 billion, of transactions over the last three years, saving its customers around £45 million in banking fees that would have been incurred when sending money to another country.

The London-based start-up, which in 2013 raised $6 million from investors, including from Mr. Thiel’s venture capital firm, Valar Ventures Management, offers foreign exchange transfers across Europe but has yet to break into the United States. (The company offers a limited product for dollar transactions that does not include using peer-to-peer technology to match customers in different countries.) The company’s largest markets are currently Britain, Germany and France.

The full article can be found at NYT DealBook.