Price Talk

  

Categories: Marketing

It happens in whispers more than voices. That's the "talk."

There's an offering coming...probably an IPO. The price talk is coming from the capital markets team, the sales team, maybe a few well-placed bankers. The stock was gonna come public at $23. A few whispers about the IPO of Netscape and eBay and dozens of modern flavors wherein the stock zoomed up 100% on Day One. So the bankers and brokers are talking about $23, guiding the buy side buyers of those shares in mutual funds and hedge funds and fat family offices, but mumbling about a first print of $30...maybe $35...maybe even $40.

You want in? You want money? You wanna be rich, successful, powerful? Then you buy. Or don't. And just be a mediocre schlub like your milkman father.

That's how the price talk goes in the trenches of some gamey brokerages. And we play.

Related or Semi-related Video

Finance: What is a subscription price?3 Views

00:00

Finance allah shmoop what is a subscription price Well in

00:07

the old days you'd actually subscribe to these things They

00:11

were called magazines and they came on this stuff called

00:16

paper and there were tons of them Different focuses our

00:19

folks i of your fancy pants gardening people time and

00:24

lifestyle There was a set price if you wanted a

00:26

year These things you paid it while the term relates

00:28

in all things finances well In this sense a subscription

00:32

agreement applied directly to a new issue of shares from

00:34

a company or securities anyway raising money teo you know

00:38

pay off their new fleet of corporate jets are open

00:40

up china as a new market or for that pesky

00:42

lawsuit they got hit with for their products Apo supposedly

00:46

sticking teo certain types of skin So in this type

00:49

of offering offered preemptively to already existing holders of shares

00:54

a subscription agreement outlines the terms at which current investors

00:57

can invest in the new offering like fioretti ona hundred

01:00

shares of snail co The shipping company that vows to

01:03

send your packages slowly and carefully and they're trading and

01:07

i'll say eighty bucks each Well then that company might

01:10

have a rights offering in which current shareholders get the

01:12

right to buy new shares at say seventy seven bucks

01:15

each Well that's seventy seven dollar price is fixed as

01:18

the subscription price I'ii buyers of the incremental sale of

01:22

securities Get the right to pay seventy seven bucks for

01:24

them and they usually come in a discount to the

01:26

current market price So as the kind of sort of

01:28

semi guarantee that the full allotment of shares that the

01:31

company wants to sell well in fact actually be sold

01:34

to people who have already indicated that they like the

01:37

company or they wouldn't be holding the shares in the

01:39

first place And that goes true Ah even if those 00:01:42.119 --> [endTime] shares are sold very very slowly

Up Next

Finance: What is an IPO?
25 Views

What is an IPO? IPO stands for initial public offering. These are used when a company decides to go public; meaning people can buy shares of the co...

Finance: What is a Prospectus?
14 Views

What is a prospectus? A prospectus is a document that gives the investor information on their investment. The SEC says that if a company is going t...

Finance: What is an Underwriter?
82 Views

What is an underwriter? Hit play to find out.

Find other enlightening terms in Shmoop Finance Genius Bar(f)