Prada Ipo or Not

In: Business and Management

Submitted By lesliepattinson
Words 1491
Pages 6
Problem: Prada requires a significant amount of capital both to re-finance debt that is maturing in the next six to twelve months and to finance its intended growth into the Asian (especially Chinese) markets

Alternative Solutions:
#1) IPO: (Initial Public Offering) Cons: High tax and pricing "We received little demand from our (retail) clients for the (Prada) shares. It might be the 12.5 percent tax that scared them away and the pricing itself was expensive when it compared with its peers," said Alfred Chan, chief dealer at Cheer Pearl Investment. "Unlike institutions, our retail clients hold the shares for a much shorter term," he added.

"Consumers are willing to pay a very high premium chasing after brands, but it's not the case for investors. Investors are concerned about reasonable valuation and pricing" -Conita Hung, head of equity - research of Delta Asia Financial.

Prada warned in its IPO prospectus that Hong Kong residents would be liable to a withholding tax on dividends on top of the capital gains tax. Hong Kong is known for its low-tax regime, with no capital gains taxes, no sales tax or value added tax (VAT) and has among the smallest income taxes on salaries.

Apart from the tax issues, retail appetite for Prada may have been reduced due to volatile global markets in recent weeks

“There’s going to be quite a lot of pressure on Prada,” said Espinasse, the author of IPO: A Global Guide. “The fact that retail investors haven’t gone for it is going to be an issue.”
Individual investor demand for Prada shares suffered because Hong Kong and Italy have not signed a double taxation agreement. Hong Kong investors will be subject to a capital gains tax of 12.5 percent, and a 27 percent tax on dividends, according to its IPO prospectus. The dividend tax…...

Similar Documents

Understanding Ipos and Ipo Scams

...Understanding IPOs and IPO Scams You don’t have to spend too much time around the stock market to discover that there’s something fishy about many stocks’ initial public offerings, (IPOs).  The standing joke is that IPO really stands for “It’s Probably Overpriced”.  While that may or may not be true in any given case, there are a large number of pitfalls awaiting the would-be IPO trader or investor.  It’s a case of caveat emptor, and in order to be suitably wary you need to understand how an IPO works and how it can be manipulated to your disadvantage. An IPO is the means by which a private company is sold to the public.  The owners of the company will approach a major investment bank (sometimes referred to as a “bulge bracket” bank) to underwrite the IPO.  That bank will then create a syndicate of banks and brokerages to run the IPO.  Stock shares are then sold by the company to the syndicate and by the syndicate to the syndicate members’ customers.  The deal can be structured a couple of different ways, but in general the syndicate guarantees they will find buyers for the shares, accepting financial risk if they fail.  The syndicate sells the shares of the soon-to-be public company at a higher price then they acquired them.  This gap is set as part of the underwriting contract, and has historically been about 7%.  Once the shares have been “allocated” to the syndicate’s customers, the stock can begin trading on an exchange.  The bulge bracket bank which lead the IPO......

Words: 2268 - Pages: 10


...  The PRADA Group Industrial activities Raw materials PRADA Group retail distribution channels Licensing agreements and joint ventures PRADA Group figures March 2012 PROFILE OF THE PRADA GROUP Prada was founded in Milan in 1913 by Mario Prada, Miuccia Prada’s grandfather, who opened in the prestigious glass-covered Galleria Vittorio Emanuele II arcade in Milan an exclusive shop selling leather bags, trunks, beauty cases and luxury accessories, soon becoming a favourite port of call for the more elegant and refined members of the European aristocracy and upper classes. In 1919 Prada was appointed Official Supplier to the Italian Royal Household; as such, it was entitled to incorporate the House of Savoy’s coat of arms and knotted rope design into its logo. In the late seventies, Miuccia Prada and Patrizio Bertelli started their collaboration, laying the foundations for the company’s subsequent international development. Patrizio Bertelli is the first in the luxury industry to introduce a new business model, applying uncompromised quality throughout the whole production chain and a constant, careful control over the entire process. Miuccia Prada’s creativity, able to infuse her work with thoughts linked to her day-to-day experiences and observations of the environment in an original innovative way – thus anticipating trends - never transcends the brand’s quality core-value and historic craftsmanship know-how. This skilful balance makes it possible for Prada to......

Words: 3091 - Pages: 13

Prada Case Analysis

...“FINANCE” Course “PRADA: TO IPO OR NOT TO IPO: THAT IS THE QUESTION, AGAIN” case analysis Brief summary of the case with the emphasis on managerial problems that Prada faces. Prada currently requires a significant amount of capital both to re-finance debt that is maturing in the next six to twelve months and to finance its intended growth into the Asian (especially Chinese) markets. Since financial markets are aware of Prada’s pressing need to raise capital, it is important for the board of directors to develop a credible strategy for raising the necessary capital of at least €1 billion. Although the press has been suggesting that Prada will do an initial public offering, the company has tried this several times in the past with no success, mainly because of bad timing (9/11, the SARS outbreak, and the ongoing global financial crisis and European sovereign debt crisis). The board has approached Guido Santini of the investment bank Grupo Capo Milano to come up with a number of credible alternatives and a strategy for raising the needed capital. 1. What is the current and future outlook for the luxury goods segment over the next couple of years? How should Prada position itself to prosper in this market? Luxury goods segment proved to be resilient to the economic crises and had consistently grown from 1994 till 2010.The luxury industry grew approximately by 2% per year until 2007, and by 1% per year from 2007 to 2010. Beginning from...

Words: 771 - Pages: 4

Prada Digital Marketing

...Prada, a well-known Italian luxury brand, which own retail stores all over the world for decades. As a famous brand with 100 years history, founded by Mario Prada in 1913, Started from a small leather handbag workshop, with absolutely superior quality of design for its competitive strength of marketing. Prada dedicated on producing life style of elegance and sophisticated products and demonstrated its brand identity as “Contemporary classic, culturally elegant”. Today, Prada became a fashion empire with huge asset and related to numbers of people, which is including the sales, workers, managers and so on. In recent years, economic crisis crush the whole world’s economy, Prada is suffering as well. So, developing a strong marketing strategy for Prada is imperative. Though Prada has developed approximately 100 years and gained rich experience of traditional marketing and new marketing, there are still some drawbacks on new types of marketing. To choose an appropriate marketing trend, which need to adapt to nowadays society. Therefore, to exploring more opportunities in the twenty-first century, new type of marking methods should be introduced to cater to this network era. Evaluate the marketing trend Marketing trend: From traditional marketing to digital marketing With the popularization of network and smartphone, E-commerce and E-business has become more popular and more people discovered the advantages of online shopping. Compared digital marketing with......

Words: 1599 - Pages: 7

Devil Wear Prada

...Topic: “Devil wears Prada”- Runway fashion magazine: Aspects and types of culure I. Introduction “Devil wears Prada” was presented in 2006, based on the Lauren Weisberger's novel of the same name. This is the story about a girl named Andrea Sachs who want to be a real journalist. For her wish, she opted to become an assistance of Miranda, a tough editor-in-chief of Runway fashion magazine. From there, she had to overcome all the challenges and the lure of the luxury life which were brought by this job. Particularly, the film also mentioned impressively the organizational culture theory of Runway fashion magazine company. II. Aspect of culture in Runway fashion magazine company via “Devil wears Prada”. 1. The basic, underlying assumptions As the film shown, all decisions were made by Miranda, the editor-in-chief. Additionally, the employees even could not make mistakes. Their ideas were also considered strictly by Miranda. About the kind of people employed, the knowledge of the employees must be high in fashion. Moreover, they had to be passionate in fashion such as Emily, one of Miranda’s assistances or Nigel, an art director of Runway. One significant thing of this organization is that when the employees did something right, they would not be promoted or complimented. However, when they made mistakes, they could be scolded or even dismissed. 2. Overt belief Nigel, the art director of Runway said: “This is a place which product many excellent artists......

Words: 1017 - Pages: 5

Ipo Paper

...James Holliday April 3, 2011 FI516 IPO Paper Identify the company and its industry. Pandora Media, Inc. is an internet streaming radio service used by more than 80 million listeners. Pandora, which has a catalog of 800,000 songs from more than 80,000 artists, has roughly half the market for Internet radio in 2010, according to a study published in November by Ando Media. Though the service is wildly popular, it has yet to make a profit. The Internet radio station generates playlists based on a user's favorite artist or song. As part of the company's Music Genome Project, songs are analyzed according to musical features -- including details of instrumentation, harmony, lyrics, melody, rhythm, and vocals. Users enter the name of a song, and Pandora creates a playlist of songs with similar characteristics. Pandora's service, free to its more than 80 million registered users and available only in the US, is supported by local and national advertising. Pandora chief strategy officer Tim Westergren founded the company in 2000 and it filed for an IPO in 2011. Discuss important financial and other facts about the company from its SEC filings. In its papers filed with the Securities and Exchange Commission, Pandora reported a $16.8-million loss on $55.2 million in revenue for its fiscal year ended Jan. 31, 2010. From Feb. 1, 2010 through Oct. 31, Pandora narrowed its losses to $328,000 on $90.1 million in revenue. Because Pandora is largely a free service, only 9% of its...

Words: 925 - Pages: 4

Prada Should Ipo or Not initial public offering (IPO), various debt-funding alternatives; and, the possibility of a strategic partnership. it must be clear to the customer how you are adding value to its business if you want this recommendation to be executed and get paid for it. What are the business circumstances of this company and how do they translate into the need for more or less cash-flow flexibility? Does the existing capital structure—assuming the company can’t change its business practices—provide the company with the cash flow flexibility (more or less) that it wants? Why? In terms of the possible alternatives you are considering which would you recommend to the company—and why? Make your pitch! In so doing, consider using the cost versus flexibility framework. Business Circumstances; Flexibility Prada currently requires a significant amount of capital both to refinance debt that is maturing in the next six to twelve months and the planned financing of growth in the Asian (especially Chinese) markets. Since financial markets aware urgent need Prada, are to raise capital, it is important that the Board of Directors of a credible strategy to increase the required minimum capital of 1 billion? to develop. Although the press was suggesting that Prada is to do an IPO, the company has tried this several times in the past without success, mainly because of poor timing (9/11, the SARS outbreak and the ongoing global financial crisis and the European sovereign debt crisis). China......

Words: 385 - Pages: 2

Ups Ipo

...Rebeka Ramos Panther ID - 1948265 ACG – 6175 Case 3: United Parcel Service’s IPO 1. How is UPS performing? Back up your assessment with your financial analysis. What factors are driving this performance? Since it first opened for business 1907, UPS has proven to be a worthy competitor and more importantly a threat to be taken seriously. By 1999, after almost a century in business, UPS had captured 51% market share of the $43 billion dollar US package delivery industry. That same year they were named “Company of the Year” by Forbes and the “World’s Most Admirable Global Mail, Package, and Freight Delivery Company” by Fortune. They reported over $25 billion in revenue, which they attributed to their loyal employees, extensive geographical reach, and strong customer relations. They had become the largest parcel delivery company in the world, daily having contact with over 1.8 million customers, picking up 13 million packages, and making delivers to over 6 million business and residential addresses worldwide. Several key factors played a considerable role in UPS’ exceptional performance and industry success. For starters, UPS has always been committed to innovation, beginning as early as 1920 with its invention of the first ever-mechanical sorter and conveyor built system. UPS is also been credited with breaking new ground in delivery logistics, after creating the model for and implementing the practice of consolidating deliveries based on neighborhood groupings.......

Words: 1111 - Pages: 5

Prada Case

...relevancia Brasil. Prada se inserta en el mercado de manera significativa desde 19… con la visión de Miucci Prada (nieta del fundador) junto con la de su esposo a cargo de la empresa. En lo que respecta al futuro del mercado, no se prevén cambios significativos en el mismo. Se espera que el mercado Europeo como el americano siga creciendo (tasa del 4-5% anual por los próximos cinco años) como el Japonés (1-2% por año durante los próximos cinco años). El mayor crecimiento esperado es en Asia (10-11% anual) con especial énfasis en China (15% anual). 2. 3. Los objetivos que tiene en mente la dirección de Prada son el pago de sus obligaciones financieras y la expansión al mercado Asiático (al ser una oportunidad atractiva de crecimiento). Las opciones que analiza son tres: a. Emitir acciones públicas: al igual que como había intentado en diversas oportunidades, Prada puede realizar una IPO (“Initial Public Offer”). Esta opción trae aparejada un aumento en la regulación por parte de entes estatales como una pérdida de control para la familia Prada. Aún cuando las acciones emitidas sean sin derecho a voto, se estaría duplicando el PN de la empresa (1.000.000 de “””USD””” estimados). Además Prada se somete a la incertidumbre de no saber cómo el mercado va a aceptar o no sus acciones. Teniendo en cuenta esto Prada debería someterse a un tedioso proceso de “due diligence” para ser aprobada su operatoria en la bolsa. b. Parthnership Estratégico: Prada podría......

Words: 886 - Pages: 4

Devil Wears Prada

...Melissa Learish Mrs. Rutt-Houser AP Senior English: Period 2 14 April 2015 The Devil [and I] Wears Prada It is every girl’s dream to graduate college, move to the big city, and risk everything in order to fulfill their dream. In fields such as writing, publishing, and editing, one must be willing to start from the bottom in order to claw their way to the top. One must take any job available to them that will potentially create powerful connections to help pursue their goals. Andrea Sachs is no exception. Fresh out of college, she acquires a job in New York City that every person trying to break in to the fashion industry would die to have: junior personal assistant to the editor in chief of Runway magazine, Miranda Priestly. Ironically enough, Miranda is anything but “priest”-ly. She takes advantage of Andrea, forcing her to complete humiliating, impossible tasks for her. To make matters worse, Andrea does not exactly fit the image of someone working at Runway magazine in terms of her mentality and her physical appearance. Awkward, a size six (practically obese in her line of work), and at the bottom of the corporate food chain, she is less than thrilled to be put into this position. However, she keeps her goal in mind, and this encourages her to put on a happy face as she absorbs the torment she receives from her colleagues. Outside of the office, Andrea lives with her boyfriend. The stress of Andrea (Andy)’s job takes its toll on their......

Words: 2716 - Pages: 11

The Divel Wears Prada Research

...The Divel Wears Prada Movie Project Principles of Management, BUS 499 Dr. Hayat Habhab Group Members: Deema Al-Humaidhi, PAM153 Asmaa Zahran, PAM159 Hanadi Arwa Razan   Table of Content Title page ……………………………………………………..1 Table of content …………….……………………………....... 2 Introduction ……………………………………………….…. 3 Data Collection ……………………………………………… 5 Personality Analysis ……………………………….………… 6 Supported theories …………………………..……………….. 9 Conclusion ………………………………………………….... References ………………………………………………….… 14   Introduction The “Devil Wears Prada” is a 2006 comedy-drama film based on Weinberger’s 2003 novel of the same name , it’s includes different types of personality and characteristics in different jobs occupation and it’s a good topic to explain the organizational behavior and its aspects in the real business life. Organizational behavior is the study of both group and individual performance and activity within an organization. It examines human behavior in a work environment and determines its impact on job structure, performance, communication, motivation, leadership, etc. The movie is about Andria Sacks a newly graduate girl from Northwestern University who aspire to be a journalist and writer. After she graduated she start applying for a job, through Elias Clark recruitment agency she got a job in the Runway fashion Magazine in New York city that job “a million girl would die for”, She was hired as the second assistant to......

Words: 2632 - Pages: 11

Ipo on Gopro

...GOPRO How their IPO affected them. Christian Pichardo Principles of MicroEconomics Mr. Peter Cronrath April/4/2015 TABLE OF CONTENTS Introduction……………………………………………… 3 GoPro…………………………………………………… 4- 5 IPO ……………………………………………………… 6 Problem…………………………………………… 7- 8 Solution…………………………………………… 9 Charts……………………………………………… 10-11 References……………………………………… 12 INTRO The stock market is like a playground for business. Business’s either collapse or succeed when stock prices go up or down depending on the market at the time; it’s like gambling. The stock market is a medium for business’s and investors who want to be part of the company to interact. The NYSE or New York stock exchange is the capital, the kingdom if you will where all the business takes place. Companies issue stock with the Securities and Exchange Commission to be able to sell shares on the Stock Market. This is done to raise capital for growth and improvement of the company. An IPO or Initial Public Offering is the first time a company ever sells shares of stock in the stock market. It’s a big event because after an IPO all the companies’ financial information will be public. It does have its pros and cons. On the bright side it helps bring in a lot more funding to expand the company, it’ll be able to compensate in stocks, and the owner will usually have the majority of shares and...

Words: 2613 - Pages: 11

Ipo Facebook

...Facebook announced its $5 billion IPO late Wednesday afternoon. But what is all the hype about? What is an IPO, how does it work, and will a publicly traded Facebook affect how we use the social network on a daily basis? Here's a quick guide. WHAT EXACTLY IS AN IPO? When a privately owned company makes an Initial Public Offering, it means they're moving to be publicly traded on the stock market for the first time. That means that anyone can buy stock in the company and own a portion of it. Ads By Google Online Trading Plus500®: APPL, Ebay, HP Commodities, No Fees! Bilforsikring -Sjekk pris Nemi Bilforsikring testvinner i VG. Sjekk din pris på bilforsikring her UK Fixed Income Aberdeen Managed UK Fixed Income Assets. Learn More. Aberdeen-Asset.NO Going public can help a company raise significant capital if a lot of people want to buy its stock. It also means that the company has to publicly disclose details about its finances, like its earnings, that it previously kept private. WHO DECIDES THE VALUE OF AN IPO? An investment bank determines how much money the company can expect to make on the stock market based on a number of factors, from the health of the economy to how popular the company's product is expected to be in the future. The initial valuation is always a bit of a gamble, since the stock has never been traded publicly before, and analysts can't look at past behavior to figure out how it should......

Words: 860 - Pages: 4

Facebook Ipo

...Facebook is considered to be, and on track to be one of the biggest IPO offerings ever. It is going to be the biggest Internet IPO ever. This is one of the biggest and most talked about topics in the business world today. Many big time investors and even small time moms and pops have plans of investing in Facebook after all the hype and speculation that’s is being made about the IPO offering. Facebook has been said to have the potential, through this IPO offering and their publicizing of their company to make many individuals rich. Because of this public knowledge, there are many insiders that are trying to take advantage of this situation by already trading stocks as if it were already public. In comparison to many other companies that, when they go public on average have between 50 and 100 investors, Facebook already has more than 1000 shareholders apart of their company. The company is supposed to be in a quiet period and not talk to investors, or try to create more hype or to overprice their stock because of the federal rules of the SEC Policy of 1933. They are urged not to jump the gun. As an example, when Google spoke to and interviewed Playboy, they had to include that interview as apart of their final filing. The concern however, is whether or not the insiders of Facebook may be limiting the IPO by pushing their value. The CEO and founder of Facebook, Mark Zuckerberg, had initially held firm to a valuation of $100 billion, but since the company is already being......

Words: 370 - Pages: 2

The Devi Wears Prada Essay

...The Devil Wears Prada Essay By: Winnet The movie version of “The Devil Wear Prada” is superior to the novel because it explains the different types of stereotypes dealt with better, it is more visually appealing, and it is easier to connect to the characters. The movie itself is overflowing with different types of stereotypes. An example would be when Nigel tells Andy that” as a child, he told his family he was attending soccer practice when he was really taking sewing lessons, and read Runway under the covers of his bed at night with a flashlight,”. This shows us that Nigel is afraid of what people will say about him. They may not take him seriously because he likes to do female jobs. By saying that he is going to soccer practice it does not make anyone suspect anything. The book did not do a very good job on explaining the different types of stereotypes. Nearly, every man that appears on the pages of “The Devil Wears Prada” is so homosexual that it begins to feel like a mock. It is common knowledge that a group of men in the fashion industry are homosexuals. However, in the book, the majority of male workers that work in the publishing industry are gay. In addition, that those who are gay are incapable of holding decent conversations without devolving into gossip and slander. Firstly, in the book The Devil Wears Prada “every time they mentioned a homosexual person they would be engaging in some...

Words: 686 - Pages: 3