Why Stock Support?

Written by William Cate


Why Stock Support? By William Cate Published April 1999 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

If investors won't buy your stock, you'll never find an IPO underwriter. Without an underwriter, your Public Company can't raise money. The underwriter's clients buy your stock withrepparttar expectation that it will appreciate. If investors don't buy your stock,repparttar 112499 underwriter's clients will lose their money. The underwriter will lose their clients. Underwriters refer to losing their clients as "Turning their Book." If they can't replace their lost clients,repparttar 112500 underwriters are out ofrepparttar 112501 brokerage business. It's for this reason that underwriters expect you to supportrepparttar 112502 share price of your public company.

When buying exceeds selling, your share price goes up. When selling exceeds buying, your share price goes down. Your Stock Support Plan should guarantee that buying exceeds selling.

If your private company is well known torepparttar 112503 investment community, you will have a "Hot Stock." Buying will exceed selling andrepparttar 112504 underwriter's clients will see share price appreciation. Companies like Microsoft, Netscape, or Solomon Brothers are examples of "Hot Stock" issues. The stock support problem for these companies is sustaining investor interest after their share price settles.

Your private company can be profitable. It should be in an industry currently popular with investors. Your stock support plan must attract investors based upon your company's fundamentals. Your investors must be prepared to buyrepparttar 112505 stock fromrepparttar 112506 day your company starts to trade. You must sustain buying at a share price aboverepparttar 112507 underwriter's Initial Public Offering (IPO) price.

Your private company may be a startup or unprofitable. If so, it must be in an industry currently popular with investors. Usually, you must supply part ofrepparttar 112508 underwriter's clients buying your IPO or Private Placement. Usually, this means that your family, friends and business associates will be required to buy 50% to 90% ofrepparttar 112509 IPO or Private Placement stock. You will be expected to ensure buyers at share prices aboverepparttar 112510 IPO or Private Placement share price.

Unless your company is a "Hot Stock."repparttar 112511 underwriter will ask you about your stock support plan. They may want you to supply some ofrepparttar 112512 buyers for your IPO or Private Placement. They will definitely want you to ensure a secondary market for your shares. If you can't support your share price, don't expect a financing. The need to supply secondary market stock buyers isrepparttar 112513 reason that promoters take more companies public than entrepreneurs.

European Stock Exchange Listings

Written by William Cate


European Stock Exchange Listings By William Cate Published July 1999 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

An axiom: When buying exceeds selling,repparttar share price goes up. When selling exceeds buying,repparttar 112498 share price goes down. The reasons forrepparttar 112499 buying or selling are secondary torepparttar 112500 act of buying or selling.

The goal of your stock support plan is to encourage buying and discourage selling. One tactic in your battle for a strong share price is to list your company's shares on a European Stock Exchange.

Europeans are investors, not speculators. They'll carefully reviewrepparttar 112501 fundamentals of your company. I advise clients to sell their product or service in Europe. It gives your company credibility with potential European investors. As a rule, Europeans are more interested inrepparttar 112502 steak thanrepparttar 112503 sizzle.

Does your company trade onrepparttar 112504 New York Stock Exchange (NYSE)? You should list it onrepparttar 112505 International (London) Stock Exchange. Does your company trade onrepparttar 112506 Over-the-Counter Bulletin Board (OTCBB)? You should carefully select one of Europe's risk-capital Stock Exchanges. Here are ten issues you should consider in selecting your European Stock Exchange. 1. Can you file in English? 2. Willrepparttar 112507 Exchange accept your SEC filings? 3. Where arerepparttar 112508 small capital investors? American companies consistently miss a primary source of small capital investors allied to

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