IPO: Would you purchase at the offering price? Why did the company use an IPO?
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IPO Questions
Pick a company that had an initial public offering in the past 5-10 years.
Identify the IPO terms and answer the following questions:
1) Did this company need to go public to in order to meet its financial needs?
2) As an investor, would you have been willing to purchase the company's stock at the offering price? Why or why not?
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Solution Summary
In a 768 word solution, the reponse gives us a good discussion about the IPO for Telkom SA.
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THE COMPANY IS TELEKOM SA
Telkom SA is the incumbent telecom carrier in South Africa. Though its monopoly ended in 2002, it maintains 4.7 million access lines providing local access, domestic and international long-distance, and data network services. It also operates Vodacom, its 50%-owned subsidiary that is South Africa's leading wireless carrier, with 12.8 million customers (UK-based Vodafone Group owns 35%; South African investment firm VenFin owns 15%). The company held its IPO on the NYSE in 2003. After the IPO the government of South Africa owns 38% of Telkom. Thintana Communications, a consortium of US-based SBC Communications (60%) and Telekom Malaysia (40%), owns a 15% holding in Telkom SA after selling half its stake in 2004. The long-delayed partial privatization included an unusual pricing scheme. Members of a group of South Africans classified as `historically disadvantaged individuals' were offered a 20% discount to the offering price on the shares. The discount, known as the Khulisa offer, was made available to those individuals who were denied the right to vote or otherwise discriminated against under apartheid. In addition, if these individuals hold on to their shares for two years, they will qualify for a loyalty bonus of one extra Telkom ...
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