going public--microsoft英文版本.pdf

Journal of Case Research in Business and Economics Going Public—Microsoft, 1986 Hassan Shirvani University of St. Thomas Barry Wilbratte University of St. Thomas Abstract The case takes the reader through the IPO process using the Microsoft 1986 public offering as an illustration. It reveals the motivations of the corporate participants and investment bankers, the interaction between the market and firm’s fundamentals, and the negotiation process in setting the offer price. It begins with Microsoft executives’ internal discussion and reasons for considering an IPO, continues with the process of selecting underwriters, and goes on to trace the events of the road show process. Ultimately, it reveals how the final offer price and the underwriting fees were negotiated. Keywords: offer price, syndicate, prospectus, road show, institutional investor, the book Going Public, Page 1 Journal of Case Research in Business and Economics Introduction On March 13, 1986, Microsoft had a highly successful initial public offering (IPO) at an offer price of $21. By the end of the day, the stock price had risen to $35.50, and Bill Gates made the headlines as the wealthy owner of 45 percent of the corporation’s stock. The actual public offering occurred at the end of an arduous 5-month process during which underwriters were selected, numerous legal and regulatory issues were hammered out, potential investors were courted, and the expected terms of the offering changed dramatically. At various points during the process, the expected offer price varied from $ 15, to a range of $16-$1