GREY:SWYDF - Post by User
Comment by
Durkastanon Jun 17, 2010 8:15am
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Post# 17196974
RE: RE: RE: NOW ,NEXT STEP IS RENARD 65
RE: RE: RE: NOW ,NEXT STEP IS RENARD 65An investment bank underwrites the offering and has the network to distribute it. The management of a diamond company doesn't want to spend their limited resources trying to get people to buy their stock, so they hire a specialist who takes care of everything for them for a fee.
Investment banks will usually do one of 2 things with a new offering:
1) They will guarantee the offering, meaning the investment bank buys up all of the new shares at a slight discount and takes care of placing the shares with clients.
2) They will attempt to sell all of their shares on a 'best efforts' basis, meaning they will try their best to sell all of the offering to their clients. They do not guarantee it, and if the market is soft then the company may find themselves with leftover stock.
On a small offering like this, there is little doubt that it will get snapped up either way.