Sunday, January 29, 2006

Multiple roles: IPO firm and Investment Banker

What a great article for a corporate or an institutions class! Not only is Weisel playing the lead in their own IPO, but also you get a chance to see a secondary offering as CALPERS is selling a portion of their stake.

Latest News and Financial Information | "While San Francisco-based Weisel is taking a risk in pricing its own IPO, it's not breaking new ground. Goldman Sachs, among others, underwrote its own offering.

'It's hardly unusual for there to be tensions between an investment bank and its client,' said Kenneth Froewiss, a professor of finance at New York University.

'The investment banker typically spends a fair amount of time courting the IPO client and telling them how wonderful they are, and then once they have the lead, of course the investment bank has to start worrying about the liability in terms of selling these shares,' Froewiss continued. 'The tone changes, the mood changes ... Things get a little tense.'"

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