Presentation is loading. Please wait.

Presentation is loading. Please wait.

Dutch Auction https://store.theartofservice.com/the-dutch-auction-toolkit.html.

Similar presentations


Presentation on theme: "Dutch Auction https://store.theartofservice.com/the-dutch-auction-toolkit.html."— Presentation transcript:

1 Dutch Auction https://store.theartofservice.com/the-dutch-auction-toolkit.html

2 Initial public offering - Dutch auction 1 One version of the Dutch auction is OpenIPO, which is based on an auction system designed by Nobel Prize-winning economist William Vickrey https://store.theartofservice.com/the-dutch-auction-toolkit.html

3 Initial public offering - Dutch auction 1 In the face of this resistance, the Dutch Auction is still a little used method in U.S https://store.theartofservice.com/the-dutch-auction-toolkit.html

4 Initial public offering - Dutch auction 1 Moreover, some forms of the Dutch Auction allow the underwriter to be more active in coordinating bids and even communicating general auction trends to some bidders during the bidding period https://store.theartofservice.com/the-dutch-auction-toolkit.html

5 Initial public offering - Dutch auction 1 A Dutch Auction IPO by WhiteGlove Health, Inc., announced in May 2011 was postponed in September of that year, after several failed attempts to price https://store.theartofservice.com/the-dutch-auction-toolkit.html

6 Online auction business model - Dutch auctions 1 However, with actual on-line Dutch auctions where the price is descending, it was found that auctions have on average a 30% higher ending price than first-price auctions with speculation pointing to bidder impatience or the effect of endogenous entry on the Dutch auction. https://store.theartofservice.com/the-dutch-auction-toolkit.html

7 IPO - Dutch auction 1 Both discriminatory and uniform price or Dutch auctions have been used for IPOs in many countries, although only uniform price auctions have been used so far in the US https://store.theartofservice.com/the-dutch-auction-toolkit.html

8 IPO - Dutch auction 1 In the face of this resistance, the Dutch Auction is still a little used method in U.S https://store.theartofservice.com/the-dutch-auction-toolkit.html

9 IPO - Dutch auction 1 Moreover, some forms of the Dutch Auction allow the underwriter to be more active in coordinating bids and even communicating general auction trends to some bidders during the bidding period https://store.theartofservice.com/the-dutch-auction-toolkit.html

10 IPO - Dutch auction 1 An article in the Wall Street Journal cited the reasons as Broader stock-market volatility and uncertainty about the global economy have made investors wary of investing in new stocks.[http://www.statesman.com/news/b usiness/whiteglove-seeks-to-raise-325- million-in-dutch-auc/nRZg9/ WhiteGlove seeks to raise $32.5 million in 'Dutch auction' IPO] https://store.theartofservice.com/the-dutch-auction-toolkit.html

11 Share repurchase - Dutch auction 1 The firm then compiles these responses, creating a supply and demand|demand curve for the stock.To understand the Dutch auction bidding and outcome from actual shareholder tendering responses, see Bagwell, Laurie Simon, Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity 1992, Journal of Finance, Vol https://store.theartofservice.com/the-dutch-auction-toolkit.html

12 Share repurchase - Dutch auction 1 The first firm to utilize the Dutch auction was Todd Shipyards.Bagwell, Laurie Simon, Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity 1992, Journal of Finance, Vol. 47, No. 1, page 73. https://store.theartofservice.com/the-dutch-auction-toolkit.html

13 List of Dutch inventions and discoveries - Dutch auction (1600s) 1 In addition to cut flower sales in the Netherlands, Dutch auctions have also been used for perishable commodities such as fish and tobacco. https://store.theartofservice.com/the-dutch-auction-toolkit.html

14 Dutch auction 1 A 'Dutch auction' is a type of auction in which the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined reservation price|reserve price (the seller's minimum acceptable price) is reached. The winning participant pays the last announced price. This is also known as a clock auction or an open-outcry descending-price auction. https://store.theartofservice.com/the-dutch-auction-toolkit.html

15 Dutch auction - Auction process 1 In a Dutch auction, the item being sold is initially offered at a very high price, well in excess of the amount the seller expects to receive https://store.theartofservice.com/the-dutch-auction-toolkit.html

16 Dutch auction - Auction process 1 Dutch auctions are a competitive alternative to a traditional auction, in which bids of increasing value are made until a final selling price is reached, because due to ever-decreasing bids buyers must act decisively to name their price or risk losing to a lower offer. http://www.epiqtech.com/auction_software -Dutch-Auction.htm https://store.theartofservice.com/the-dutch-auction-toolkit.html

17 Dutch auction - A second item auction 1 There is some confusion over terminology. Some financial commentators and some third-party auction sites use the term Dutch auction to refer to Second price auction|second-price auctions, which are different from Dutch auctions. https://store.theartofservice.com/the-dutch-auction-toolkit.html

18 Dutch auction - A second item auction 1 The price is $20 because that was the lowest successful bid (hence the second price). Since Bidder A was only awarded 1 item, and his original bid was for 2 items, he has the right to refuse the purchase of that partial amount. As a winning bidder, you have the right to refuse paying only if you are awarded less than the number of the items you were bidding on. If this were a Dutch Auction, the first bid made wins the item, regardless of value. https://store.theartofservice.com/the-dutch-auction-toolkit.html

19 Dutch auction - Public offerings 1 The United States Department of the Treasury, through the Federal Reserve Bank of New York (FRBNY), raises funds for the U.S. Government using a Dutch auction. The FRBNY interacts with primary dealers, including large banks and broker-dealers who submit bids on behalf of themselves and their clients using the Trading Room Automated Processing System (TRAPS), and are generally told of winning bids within fifteen minutes. https://store.theartofservice.com/the-dutch-auction-toolkit.html

20 Dutch auction - Public offerings 1 In this example the % at high is 66.66%, meaning only $3 billion of the $4.5 billion at 5.130% will get bonds. Bids will be filled from the lowest yield (highest price) until the entire $10 billion has been raised. This auction will clear at a yield of 5.130%, and all bidders will pay the same amount. In theory, this feature of the Dutch auction format leads to more aggressive bidding as those who in this case bid 5.115% will receive the bonds at the higher yield (lower price) of 5.130%. https://store.theartofservice.com/the-dutch-auction-toolkit.html

21 Dutch auction - Public offerings 1 [http://www.srectrade.com SRECTrade.com] uses a two-sided Dutch auction to trade Solar Renewable Energy Credits (SRECs). https://store.theartofservice.com/the-dutch-auction-toolkit.html

22 Dutch auction - Dutch auction share repurchases 1 The firm then compiles these responses, creating a supply curve for the stock.To understand the Dutch auction bidding and outcome from actual shareholder tendering responses, see Bagwell, Laurie Simon, Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity, https://store.theartofservice.com/the-dutch-auction-toolkit.html

23 For More Information, Visit: https://store.theartofservice.co m/the-dutch-auction- toolkit.html https://store.theartofservice.co m/the-dutch-auction- toolkit.html The Art of Service https://store.theartofservice.com


Download ppt "Dutch Auction https://store.theartofservice.com/the-dutch-auction-toolkit.html."

Similar presentations


Ads by Google