Dot-Com Crash

In: Business and Management

Submitted By gycp
Words 583
Pages 3
Case Study: Dot-com Crash
1)
* Venture Capitalists: * Discern between good and bad business ideas and entrepreneurial teams. * Monitor and guide their portfolio companies into a profitable well-managed company. * Investment Bank Underwriters * Provide advisory financial services to private companies who wish to proceed with an initial public offering. * Price offerings * Underwrite shares * Introduce profitable well-managed companies to investors to help companies raise funds and recommend sound investments to investors. * Sell-Side Analysts * Follow 15 to 30 companies in an industry * Form relationships with management * Follow trends in the industry * Making buy or sell recommendations * Market their research to the buy-side to provide support during a company’s IPO process. * Buy-Side Analysts and Portfolio Managers * Buy-side analysts need to convince portfolio managers within their company to follow their recommendations * Portfolio managers make the decision to buy or sell securities. * Accounting Firms * Audit financial statements of public companies to verify accuracy and freedom from fraud * FASB * Regulatory body that is supposed to establish and improve standards of financial accounting and reporting for the users of financial information.
2)
* Venture Capitalists * Substantial percentage of net worth tied up in their funds and a large share of profits aligned their interests with their investors. * Investment Bank Underwriters * Paid commission based on the amount of money that the company manages to raise in its offering. * Misaligned as the underwriters will make more money from aggressively introducing investors to IPOs and pricing offerings at a higher price. *…...

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