Behavioral Finance Grexit & Public Companies Feb 5, 2015 Behavioral Finance Economics 437

Behavioral Finance Grexit & Public Companies Feb 5, 2015 Greece 11.1 Million population Per capita income about $ 35 K Total Current Sovereign Debt = almost $ 350 Billion Went broke in 2010 Bailed out Memorandum of Understanding in Billion in debt forgiven in 2012 Troika put in charge of further payments

Behavioral Finance Grexit & Public Companies Feb 5, 2015 Now $ 4 Billion needed in two weeks ECB refused yesterday to continue to accept Greek sovereign as loan collateral Greek stocks dropped nine percent Yields on three year paper near 20 percent

Behavioral Finance Grexit & Public Companies Feb 5, 2015 Public versus Private Most companies are private; relatively few are public Vast majority of assets are in public companies Companies begin as private Then “go public” Sometimes go the other way (private equity firm buyouts, for example)

Behavioral Finance Grexit & Public Companies Feb 5, 2015 How do you go public Hire an investment bank File an S-1 Do a roadshow Sell small fraction of company to public shareholders Rules governed by 1933 and 1934 Security Acts Main rule = disclose, disclose, disclose 10K, 10Q filings

Behavioral Finance Grexit & Public Companies Feb 5, 2015 The End