Section A: Problem/Issue Statement
Following a 220% increase in profits and 800% increase in revenues over six months, eBay Inc. is considering the spare-time activity jobs of action:
1.One being an initial offering offering, requiring the deal of less than 9% of the company. This offering will be for 3.5 million shares, with an expected sale price at between $14 and $18 per share.
2.The another(prenominal) is to delay the offering for six months. This will cost eBay slightly $1 million in direct expenses; however eBays spare losses will be far greater collectible to the delay of major investment initiatives.
In determining the appropriate course of action, the following topics were considered:
1. What are the costs and benefits of eBay going familiar?
*How do current market conditions affect the decision to go public?
*What are the advantages and disadvantages of delaying the initial offering versus proceeding now?
2. What is the appropriate IPO price?
*What is the intrinsic value of eBay?
*What drives IPO price similarly intrinsic value?
*How do the various stakeholders view set:
oShareholders (current and IPO purchasers)?
oCompany?
oManagement?
oEmployees?
oInvestment Bankers?
oCompetition?
Section B: Recommendation
We recommend that eBay should go ahead with the IPO offering.
*We flavour that the company is in a good blank space counterbalance now to offer the IPO.
oAlthough other companies have been averse to issue and IPO in the past weeks, we feel that eBays line is different.
oWe can be the IPO that will heat up the market again.
*The share price that we have decided at, we feel is a reasonable price for the potential value of the company.
oSince we precious our company and we can receive the price that we privation right now there is really no reason wherefore we should wait for six months.
After reviewing the plans...
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