IPO for dummies. Part I: shares, majority shareholders, control over the company
During a recent discussion of Yandex’s IPO , a discussion was held in the comments on how stocks are traded on the stock exchange, how IPOs are going, and who benefits from it. On the advice of the other participants in the discussion, I put on a separate topic - or rather, in a series of topics - a short story, which was dispersed over several comments. If you then closely followed the topic, the main part of the story is already known to you, but nevertheless ... If not, you will surely find something interesting.
Disclaimer: This and further articles in the series are written by two habitues: honeyman , a start-up programmer experimenting in his spare time with trading on the stock exchange and creating analytical software for this, in collaboration with kaichik , a journalist and chief editor of automotive projects. If you in the previous sentence did not notice the words "financier", "licensed advisory economic services" and "rich experience" - then probably this is because they cannot be there.
')
So, part I: stocks, majority shareholders, control over the company.
What are stocks, and what are they for?
Shares, no matter how trite and obvious - this is a document confirming ownership of a part of the company.
Everything is absolutely honest: if someone collects all the shares of the company, he will receive abonus life and the transition to the next level of the company in the sole proprietorship. In the simplest case, the number of shares you have shows (a) what degree of influence you can have on the management of the company (how many votes you have if you vote) and (b) what share of profits (proportional to your share of all shares) you can get if the company decides to distribute profit by dividends. At the same time, according to paragraph (a), your vote can influence the decision whether dividends will be distributed to profit, and what size they will be. There are technically different options for implementation: there may be "non-voting" shares, or shares, which are given a dozen of votes, but these are subtleties.
Yeah, if a company started selling shares on the stock exchange, can any bigGoogle Citibank buyer buy them all and get company management?
First, during an attempt to buy up shares on the stock exchange, he will begin to have difficulties. After market participants who own these shares and are ready to sell them for a certain amount, realize that there is a serious demand for shares, they will significantly increase the sale price. So a large block of shares on the stock exchange will be very expensive: it is not a store in which the share price is fixed. Anyone offering to buy or sell stocks at any second can change their bid as they please - and will do so in order to maximize profits.
Secondly (and this is even more important), not one normal company has 100% of its shares sold on the exchange. Assume that only 20% rotates there, so the buyer will be able to redeem this free trading volume at the maximum. The remaining large blocks of shares are owned by majoritarian shareholders , who, as a rule, have a significant number of shares each and purchased them outside the stock exchange - directly from the founders / owners. For example, during the initial investment.
How is it usually?
If businessman Misha launched his social network, perhaps, at first he gave a dozen percent of the shares to the programmer Kohl, who was involved in the technical part. A dozen percent - an angel investor who gave a million rubles to unwind in a year. Thirty percent a year later, every kind of DST and Sequoia Capital, which saw the social network that grew and revitalized over the year, went off, in joy, dumping $ 5 million on advertising and the server. By that time, the number of developers of the social network had grown, and the initial “programmer” Kolya was soaking in his own office with a sign “Technical Director N. Nikolaev”. But new developers are known to work much better if well motivated; therefore, a dozen or so percent has been sold in small portions among developers (“now you’re not just writing 5 TPS reports a day, but you’re benefiting the company! thanks to you, your company grows, and the faster it grows, the faster your shares become more expensive! "). Of course, Misha himself, too, left a dozen percent - and it turned out that only 20-30% of his company's shares were listed on the stock exchange.
And if someone wants to get the company all and completely, for sole use, it will not be enough for him to buy shares on the exchange (there is only 20-30 percent). We will have to buy back their shares from Misha and Kolya (more precisely, hope that the company’s founders, who have invested their whole soul, nerves and energy, will want to sell at least one of their own shares at least for some money); redeem shares from DST and Sequoia (those emotions and moral fluctuations, as the company’s founders, will not be tested, but be healthy for shares), and then bypass all developers and promise everyone to Maybach and at home in the Bahamas.
Heard, I suppose, not once about how the developer buys small houses on the territory to build a New Shopping Center there, and some old man stands up and refuses to sell his shack - they say, “five generations of his family lived here”? The shack, of course, “effective managers” can burn together with the old man, not for the first time, and if any of the developers get bogged down, such methods will not bring his share on a platter. And if you bring such an intractable shareholder to a notary to execute a deal (and a big deal will have to be processed with a noticeable amount of bureaucracy after the company’s entry into the stock exchange), the notary will not like the number of bruises and bruises per square decimeter of skin, this also does not benefit your business .
All this I say to the fact that buying the company entirely after it began to bargain on the stock exchange, or after its shares diverged by a significant number of owners - it is easier to shoot yourself.
By the way, if anyone is interested, Yandex has three levels of “power”: ordinary shares, founders' shares (each of them provides ten times more votes than one ordinary share, but loses its power when sold) and a “golden” share that belongs to Sberbank and gives the right to veto the accumulation in one hand more than 25% of the shares (that is, the blocking stake). It is not hard to guess that any of the founders, having only 10% of shares in their hands, retains full control over Yandex.
But you can still buy a large package?
Yes you can. Agreeing with the owners of the majority shareholders directly ("to make them an offer that they can not refuse"), or on the exchange, it does not matter. Oh, yes, overpaying (regarding what is called the "market price of shares") will come in any case.
Hooray! So, if my company becomes known and enters the stock exchange, I will sell my shareholding at exorbitant prices and buy myself a Manhattan peninsula!
Not. If you want to sell a large stake, you will do so at a discount. (If you are allowed to sell it at all, for the rights and obligations of the majority shareholders are a completely different topic).
Therefore, by the way, to evaluate the status of the company's founder through the number of his shares multiplied by the value of his share is complete nonsense (remember the anecdote about the real and the virtual? ”You see, son, virtually there are three bucks in our family, but really - two prostitutes and fag ”).
Stop stop stop! If I want to sell shares, I will lose money relative to the “market price”. If I want to buy - again I will lose. Where do they disappear?
It's simple. There is no "market price." The price of the action is not the price tag-sticker "120 rubles" on the magazine "Popular Mechanics" in the newsstand. And not even the inscription on the same magazine "Recommended price - 100 rubles." Rather, it is a speedometer reading while driving in the city: an instantaneous characteristic that constantly fluctuates, usually insignificantly, but at any moment it can change anywhere, depending on the need.
Who sets it up? And how to trade on it?
It is established by the exchange. More precisely, even this way: not “it is established by the exchange”, but “it is established on the exchange”. Exchange - just an intermediary between buyers and sellers.
In the next part : the value of shares, the stock exchange, the best way to trade potatoes, and who can be found onthe stock exchange market .
Disclaimer: This and further articles in the series are written by two habitues: honeyman , a start-up programmer experimenting in his spare time with trading on the stock exchange and creating analytical software for this, in collaboration with kaichik , a journalist and chief editor of automotive projects. If you in the previous sentence did not notice the words "financier", "licensed advisory economic services" and "rich experience" - then probably this is because they cannot be there.
- Part I: shares, majority shareholders, control over the company.
- Part II : stock price, stock exchange, the best way to trade potatoes, and who can be met on
thestock exchangemarket. - Part III : the IPO process, its benefits for the company, the founders and owners, and also why the company’s management has such a tortured look when opening trades.
- Part IV : The Impact of an IPO on Adul-Affiliate Revenue.
- Part V : life after IPO.
- Part VI : the difficulty of choosing - two Lamborghini Gallardo or one Aventador?
- Part VII : about insider.
- Part VIII : Motivation.
')
So, part I: stocks, majority shareholders, control over the company.
What are stocks, and what are they for?
Shares, no matter how trite and obvious - this is a document confirming ownership of a part of the company.
Everything is absolutely honest: if someone collects all the shares of the company, he will receive a
Yeah, if a company started selling shares on the stock exchange, can any big
First, during an attempt to buy up shares on the stock exchange, he will begin to have difficulties. After market participants who own these shares and are ready to sell them for a certain amount, realize that there is a serious demand for shares, they will significantly increase the sale price. So a large block of shares on the stock exchange will be very expensive: it is not a store in which the share price is fixed. Anyone offering to buy or sell stocks at any second can change their bid as they please - and will do so in order to maximize profits.
Secondly (and this is even more important), not one normal company has 100% of its shares sold on the exchange. Assume that only 20% rotates there, so the buyer will be able to redeem this free trading volume at the maximum. The remaining large blocks of shares are owned by majoritarian shareholders , who, as a rule, have a significant number of shares each and purchased them outside the stock exchange - directly from the founders / owners. For example, during the initial investment.
How is it usually?
If businessman Misha launched his social network, perhaps, at first he gave a dozen percent of the shares to the programmer Kohl, who was involved in the technical part. A dozen percent - an angel investor who gave a million rubles to unwind in a year. Thirty percent a year later, every kind of DST and Sequoia Capital, which saw the social network that grew and revitalized over the year, went off, in joy, dumping $ 5 million on advertising and the server. By that time, the number of developers of the social network had grown, and the initial “programmer” Kolya was soaking in his own office with a sign “Technical Director N. Nikolaev”. But new developers are known to work much better if well motivated; therefore, a dozen or so percent has been sold in small portions among developers (“now you’re not just writing 5 TPS reports a day, but you’re benefiting the company! thanks to you, your company grows, and the faster it grows, the faster your shares become more expensive! "). Of course, Misha himself, too, left a dozen percent - and it turned out that only 20-30% of his company's shares were listed on the stock exchange.
And if someone wants to get the company all and completely, for sole use, it will not be enough for him to buy shares on the exchange (there is only 20-30 percent). We will have to buy back their shares from Misha and Kolya (more precisely, hope that the company’s founders, who have invested their whole soul, nerves and energy, will want to sell at least one of their own shares at least for some money); redeem shares from DST and Sequoia (those emotions and moral fluctuations, as the company’s founders, will not be tested, but be healthy for shares), and then bypass all developers and promise everyone to Maybach and at home in the Bahamas.
Heard, I suppose, not once about how the developer buys small houses on the territory to build a New Shopping Center there, and some old man stands up and refuses to sell his shack - they say, “five generations of his family lived here”? The shack, of course, “effective managers” can burn together with the old man, not for the first time, and if any of the developers get bogged down, such methods will not bring his share on a platter. And if you bring such an intractable shareholder to a notary to execute a deal (and a big deal will have to be processed with a noticeable amount of bureaucracy after the company’s entry into the stock exchange), the notary will not like the number of bruises and bruises per square decimeter of skin, this also does not benefit your business .
All this I say to the fact that buying the company entirely after it began to bargain on the stock exchange, or after its shares diverged by a significant number of owners - it is easier to shoot yourself.
By the way, if anyone is interested, Yandex has three levels of “power”: ordinary shares, founders' shares (each of them provides ten times more votes than one ordinary share, but loses its power when sold) and a “golden” share that belongs to Sberbank and gives the right to veto the accumulation in one hand more than 25% of the shares (that is, the blocking stake). It is not hard to guess that any of the founders, having only 10% of shares in their hands, retains full control over Yandex.
But you can still buy a large package?
Yes you can. Agreeing with the owners of the majority shareholders directly ("to make them an offer that they can not refuse"), or on the exchange, it does not matter. Oh, yes, overpaying (regarding what is called the "market price of shares") will come in any case.
Hooray! So, if my company becomes known and enters the stock exchange, I will sell my shareholding at exorbitant prices and buy myself a Manhattan peninsula!
Not. If you want to sell a large stake, you will do so at a discount. (If you are allowed to sell it at all, for the rights and obligations of the majority shareholders are a completely different topic).
Therefore, by the way, to evaluate the status of the company's founder through the number of his shares multiplied by the value of his share is complete nonsense (remember the anecdote about the real and the virtual? ”You see, son, virtually there are three bucks in our family, but really - two prostitutes and fag ”).
Stop stop stop! If I want to sell shares, I will lose money relative to the “market price”. If I want to buy - again I will lose. Where do they disappear?
It's simple. There is no "market price." The price of the action is not the price tag-sticker "120 rubles" on the magazine "Popular Mechanics" in the newsstand. And not even the inscription on the same magazine "Recommended price - 100 rubles." Rather, it is a speedometer reading while driving in the city: an instantaneous characteristic that constantly fluctuates, usually insignificantly, but at any moment it can change anywhere, depending on the need.
Who sets it up? And how to trade on it?
It is established by the exchange. More precisely, even this way: not “it is established by the exchange”, but “it is established on the exchange”. Exchange - just an intermediary between buyers and sellers.
In the next part : the value of shares, the stock exchange, the best way to trade potatoes, and who can be found on
Source: https://habr.com/ru/post/120842/
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