Love and hate investment bank: entrepreneurs and investment banks "cannot be depended on"

Dangdang president Guoqing in a fierce way, and rarely exposes the contradictions between listed companies and investment banks. than "very yellow very violent" network to scold more thought is, in the IPO interest chain, the issuer, investment bank, investor is how a triangular pattern? In the Western market listing rules, Chinese companies have game opportunities?　　2010 China to the United States listed companies in the data, revealed what kind of mystery? Morgan Stanley Investment Company Building, New York.　　Where Chinese companies want to go to the U.S. to love and hate in the listing of this matter, if not satisfied, Dangdang President Guoqing has three options: not listed, the listing of negotiations, insist, not satisfied with the signature or even suspended; after the listing criticisms.　　He chose the last one.　　January 15, when and to undertake its listing business of the two major investment bank-Morgan Stanley ("Morgan") and Credit Suisse-to prepare for the celebration feast, guoqing through Micro Bo opened scold.　　Since then, through micro-blog, Lee repeatedly accused the main underwriter "Morgan Stanley" in the listing deliberately depressed prices, triggering a group of "Morgan Stanley female" appeared micro-blog, launched a "very yellow very violent" network to scold, onlookers.　　than the explosive to scold, more flipping business is the abuse of the exposure of the capital market listing rules.　　Guoqing shelled Morgan Stanley, as a pebble poured into the calm lake, making the hidden contradictions between listed companies and investment banks surface. Interestingly, in an interview with Southern weekend reporters, some companies listed or preparing to go public have expressed support for guoqing, such as an entrepreneur on the market who said, "I didn't like him before, but now I think he's brave, he's a challenger," but the investment bankers are mostly dismissive,　　They generally believe that in the process of listing enterprises and investment banks in fact there are many opportunities for game, the key lies in the ability to play.　　Insist or compromise? In the listing process, guoqing in fact there are many opportunities for gaming December 8, 2010, Dangdang successfully landed NYSE. On the first day of the IPO, the 24.5-dollar opening price rose 53% per cent from the 16 dollar IPO price set earlier. By the close, its share price rose by 86.94%, closing at $29.91/share--a strong increase that made Dangdang one of the first-time U.S. listings in 2010, and a more than-a-hundredfold earnings ratio set the record for Chinese IPOs in 2010.　　These beautiful figures are widely disseminated in China. This is called "perfect" listing, but provoked CEO guoqing very dissatisfied. On the day of the listing, Guoqing sold 1.3 million ads (depository vouchers) at a 16-dollar issue.　　If it were calculated at the closing price of 29.91 dollars, he would have made less than 18 million dollars on the deal, and not even the more outstanding shares he had diluted as a result of the IPO. 27 days later, in Dangdang and the two big investment banks ready to hold a celebration feast, guoqing angrily scold open. "What is an investment bank?" They're from companies that are going publicaccess to fees; but they also have other departments of the Management Fund, access to financial benefits.　　"On Weibo, Guoqing repeatedly exerting force, he even claimed to be in for already or will IPO Chinese private enterprise evil, contend for the right, seeks the position." Indeed, this is not just guoqing anger, but many listed companies share the same feeling.　　New Wengwen, chief editor of the Journal, said in a microblog that a recent visit to the founders of a number of new IPO companies actually had a lot of opinions about American investment banks, but Dangdang has openly expressed it in an extreme way.　　However, Guoqing's behavior has attracted a question.　　Many market participants told reporters that in the listing process, Guoqing has many opportunities for gaming, so that investment banks can not make cheap.　　First, you can choose not to go public, so no one will cheat your money, of course, no one will benefit from it, including Guoqing himself. Second, who should be listed?　　Investment banks are not just a single business, but there are plenty of them to choose from, even if they have to find a Wall Street investment bank. Third, even if the investment bank has been chosen, it is still possible to exchange, negotiate, and not sign or even suspend the listing. "This is a negotiation between a company and an investment bank, and when the final investment bank is priced, it may not be signed if it feels the price is inappropriate." I do not want the price, the whole thing stopped, the investment bank is in vain, they are afraid of this situation.　　"said one international investment banker. Related reports: In the United States listed in the massive hemorrhage guoqing "wolf too Ruthless" [Page] IPO triangle game The CFO, a company that is preparing to go public in the U.S., describes their relationship with the investment bank. Unreliable, but can not be separated from the "for those who want to go offshore financing enterprises, always need to face such a triangular game: enterprises,　　Investment banks, investors. Between companies and investors, investment banks help the former to finance, and help the latter find the most appropriate investment target.　　The core advantage recognized by investment banks is the raising and management of capital.　　In general, investment banks will not only have to broker, but also to set appropriate prices, attract various shareholders to form a reasonable shareholder mix-this is the art Wall Street claims to have mastered.　　In Dangdang CFO Yang Jiahong, the reason for choosing Morgan Stanley and Credit Suisse was that, on the one hand, the two were the most experienced IPOs in the Internet industry; On the other hand, Morgan Stanley's JI and Credit Suisse's Cheung, the top three analyst in the Internet industry, were the most convinced of the analyst reports written by the IPO companies.　　But even so, guoqing is still dissatisfied with Morgan Stanley's full, because in this triangle game, entrepreneurs often feel that "investment bank is never your friend"-a company that is preparing to go public, the CFO described their relationship with the investment bank, "unreliable, but inseparable."　　Entrepreneurs have always felt that investment banks have problems in two ways: one is pricing, and the other is pricing to make some institutional investors earn more when placing shares. According to conventional wisdom, IPO prices fall below the issue price, the issuance will be regarded as a failure,The investment bank is naturally inclined to set prices low. Another reason for entrepreneurs to suspect low pricing is that, since almost every single IPO requires some institutional investors to invest, investment banks need to maintain a longer relationship with institutional investors and will naturally take care of their interests and tend to lower pricing.　　"The investment bank was relentless with us, and the fund was a lover," Guoqing wrote.　　What kind of game and mystery are hidden in the pricing of investment banks? Pricing Puzzle Bureau "This department will decide the final pricing, they stand on the level two market that side, call the fund manager every day and tell the story of the company and ask how much you would like to spend," said the senior industry insider, who declined to be named. " The market is not good or can not be sent. "The pricing of investment banks is a mystery," one industry renowned investment banker told reporters, "This is a complicated process because the operating system of investment banks is extremely complex." "The rationale is that in order to make more money-underwriting fees are usually the amount of financing multiplied by an agreed ratio-it should be possible to raise the issue price to expand the amount of financing, but in order to attract investors to purchase, investment banks often have to put low prices, the new company's PE in the industry similar companies to discount the basis of PE-just imagine,　　If no one buys the shares and starts to fall below the IPO price, the investment bank's reputation is probably ruined. "Investment banks generally get a 7% of the cost of corporate finance, the more expensive, the more money, investment banks, the higher the income, win, but too high, investors do not buy, become a double lose." The investment bank also has to consider another of its own clients, investors, and if the stock goes down on the market, what about the next one?　　Dangdang CFO Yang Jiahong said.　　The consensus of the industry is that in the mature market, the first day of the listing up 15% to 20%, often representing the market for pricing recognition, but in real practice, such precision is rare. In the United States, in general, when all the upfront preparation of a listed project is in place, it enters the implementation phase of the project.　　The real pricing process begins.　　The process of pricing is to experience the core of the investment bank, in which the investment banking department, the capital Markets department, researchers, and in-house lawyers will initially give stock advice.　　The SEC then approves the issuer, and the investment bank holds a fellows ' meeting, where industry researchers and strategic analysts position the company in terms of the company's specific circumstances and market conditions.　　Analysts are very important at this point, and they will give a detailed report on the IPO – a senior industry analyst at an American investment bank told reporters they would give a reasonable valuation based on the selling points of the stock, the position of the industry, and the market outlook.　　It was also at this time that the investment bank began a delicate game inside. The investment bankers who pull the corporate listings naturally want to be priced a little higher, while the capital market sector is more likely to protect institutional investors, and in some investment banks there will be a clear or darkThe departments that invest on their own – they want to keep prices down and give themselves margins. However, almost every investment bank is constantly emphasizing the independence of analysts, emphasizing the internal firewall mechanism. "Because unlike the company and the investment experts, often unpleasant," the analyst told reporters, "analysts in the preparation of the IPO report, the writing is very cautious, and the general report is different, the language to emphasize neutral, for the company's description, the pros and cons must be balanced-for example, positive description of four points, The inverse description is also four points. "Valuations will be given at this time. "The initial positioning is very important, is the LV bag or a motley goods, is the first class or economy class."　　The above people told reporters. Next, start the road stage, where industry researchers visit investors and send out new shares to potential investors. [Page] After the company completed a careful investigation, the investment bank began the process of listing the IPO.　　A prepared prospectus or "red herring" is issued to potential institutional and individual investors, and in many cases the company will conduct roadshow, that is, the management team to introduce the company's operating route and to promote a future outlook for potential investors.　　At this stage, the ECM (equitycapitalmarket) Capital Markets Department of the investment bank begins to make the market inquiry by way of the forecasted price range, in which the order of the institutional customer is aggregated, the subscription amount of the customer at different prices is summarized, and the price is adjusted or lowered according to the result. "The department will decide on the final pricing, and they're on the two market side, calling the fund manager every day, telling the story of the company and asking how much you'd like to spend." "However, this process does not exist who pressure who the problem, the price is not satisfied can not hair, the market is not good can not send." "Get along" business requirements can be reflected in the early agreement, you can at least affect the investment bank to do so, but the investment bank will not offer, if you do not ask, certainly not, because the more he said, the more restrictions on their own.　　"One of the investment bankers who worked at Goldman Sachs told reporters. In fact, when the IPO process, according to Chairman Yu afterwards recalls, because when the road stage has won more than 30 times times the subscription multiples, when the pricing has undergone two adjustments.　　From the initial 11 dollars, mentions the issue price 16 dollars. This is the only one of China's listed companies in the United States this year to increase the distribution range, but guoqing is not satisfied. In an interview with the Chinese operator, Guoqing recalls that he initially disagreed with the 11-13-dollar issue range because Yu persuasion could be adjusted Gao not too insistent. But even if it is 16 dollars, Guoqing still believe that the investment bank is deliberately low when the price is suspected. "December 8 Dangdang shares opened at 24.5 U.S. dollars, a few hours after the opening of the trading floor of the NYSE, the US financial channel CNBC asked to do live interview, the interview of the two presenters asked me if I think the price is low, I said that I have only one IPO in my life, as for the price set, I have no reference factor, I put myself into the hands of investment banks.　　Yu at Dangdang's media meeting. Can companies challenge Wall Street rules? The reporter interviewed a number of investment bankers said that the investment bank to provide services to enterprises are required by the enterprise, the enterprise has what kind of requirements, investment banks should provide what services. "If you are a popular listed company, the requirements of the enterprise can be reflected in the early agreement, you can at least affect the investment bank to do so, but first, the investment bank will not offer, if you do not ask, certainly not, because the more he said, the more he limits himself."　　"One of the investment bankers who worked at Goldman Sachs told reporters.　　In fact, both at home and abroad, publishers have successfully challenged the precedent of Wall Street, some at the last minute, insist on raising prices, and some simply rewrite the rules of the game. In 2005, CCB, the first of four state-owned banks, called for a 10% increase in IPO prices on the fifth day of the roadshow.　　Morgan Stanley is the main underwriter of this transaction, at that time clearly opposed, but at the insistence of the CCB final price increase issue.　　More influential internet companies are more powerful in the face of investment institutions and banks.　　Like the summer of 2004, search engine Google launched the IPO, not only put a lot of restrictions on investment banks, and even leave Wall Street, the use of "Dutch auction" way to issue-investment bank is marginalized, so that investors in the Google IPO related banks Open accounts, and submit purchase orders, auction style bidding. Recently, social networking site Facebook is creating an example of a non-listed company financing. Facebook has not yet listed, through investment institutions such as Goldman Sachs to set the market value of 50 billion U.S. dollars to become the world's third largest Internet companies, unlisted financing has not been the same as the listing.　　Facebook is getting enough money, and the founders are not sharing shares. January 24, Dangdang chairman Yu on the blog to the media after the summary, "listing is a ' super experience ' process, because we will do a public life." "(Reporter Chen Zhong, press assistant Gao, intern Jiang Yannan also contribute to this article)