All round car designer

Chapter 660 Underwriting Method
On the third day that Tesla was revealed to be going public, netizens who have not been able to wait for the official news of the rumors are probably tired of this matter. In addition, the media has not been able to get further news. The popularity of this matter is also It gradually fell down on the Internet, and few people are discussing this matter anymore.

However, just when netizens were about to forget about this incident and focus on other news, a piece of news from the "Wall Street Journal" rekindled people's interest in this incident, and this time the report , it seems to be a solid hammer!
In this report titled "Feichi Group secretly contacted several Wall Street investment banks, suspected of preparing for Tesla's listing", the reporter quoted the original words of several Wall Street investment bank executives including JPMorgan, confirming that Tesla Indeed, preparations are already underway.

Not only that, this report also attached a number of photos of Mercedes-Benz Auto Finance executives going in and out of JPMorgan and other investment banks, and the man in the photo has been confirmed to be the director of the Mercedes-Benz Auto Finance Investment Department!

In this way, the news about Tesla's upcoming listing spread throughout the Internet again, and compared to the last time, this time the media reports listed more details, including the public accounting firm Puqing. Many executives also admitted in interviews that Feichi Group is indeed preparing for Tesla's listing!
All the evidence shows that this time Tesla is really going public!
The only thing missing now is the official statement from Feichi Group.

Tesla headquarters.

The day after the news was published in the "Wall Street Journal", Zhou Fei arrived in Shanghai. According to the news from Ma Huafu, several Wall Street investment banks represented by JPMorgan have confirmed that they will participate in Tesla's listing. It's time to work, and their representatives have arrived in Shanghai, and Zhou Fei needs to come forward to sign a contract with them.

"Mr. Zhou, the security department said that a large number of reporters gathered at the entrance of the company. It should be to verify the listing of Tesla. Why don't we go through the back door?" In the elevator, Ma Huafu said to Zhou Fei.

"No need, since it has spread on the Internet, let's just confirm it, so as to give an explanation for this matter." Zhou Fei smiled and shook his head.

As soon as the group stepped out of the elevator, the reporters gathered outside rushed over, pointing their microphones and cameras at Zhou Fei and Ma Huafu.

"Mr. Zhou, it is said on the Internet that Tesla is going to go public soon. Is this true?"

"President Ma, when will Tesla be officially listed?"

"Mr. Zhou, is Tesla listed on NASDAQ? Can you disclose some specific information?"

…………

Dozens of questions flew to Zhou Fei and the others in an instant. Although the questions were different, they basically had the same meaning.

"Let me just say a few words. First of all, Tesla has indeed started the listing process and has entered the stage of investment bank counseling. As for the specific listing time, it depends on the situation. I can say Thank you all for your concern.”

After saying a few simple words, Zhou Fei and others got into the car under the escort of the security guards.

"Mr. Zhou, this meeting with JPMorgan and other investment bank representatives is mainly to discuss the way of stock underwriting, and the second is to sign a cooperation agreement." After getting into the car, Ma Huafu said to Zhou Fei.

Stock underwriting is generally divided into three types: agency sales, sales assistance and underwriting. Among them, agency sales refer to investment banks or underwriting syndicates acting as agents for issuing companies to sell stocks. Investment banks only charge corresponding agency sales fees. As for whether the stocks can be sold out, Investment banks are not responsible, and the stocks that cannot be sold will be handled by the company itself.

Sales assistance is similar to consignment sales, but for stocks that cannot be sold, investment banks will handle them instead of the issuer itself.

On the other hand, underwriting means that the investment bank takes away all the issued stocks from the company at one time, and then sells them. If the remaining stocks cannot be sold, the investment bank also buys them with its own money, and then handles them by itself.

When the form of underwriting is adopted, the stock price that the underwriter gets from the issuing company is lower than the actual issue price, and the underwriter obtains benefits through the price difference.

Generally speaking, the three underwriting methods have their own advantages and disadvantages. If the underwriting method is adopted, the advantage is that the stock can be sold at the normal issue price. The disadvantage is that the company bears a relatively large risk. Dispose of remaining stock.

The advantage of the underwriting method is that the risk that the company bears is very small, and it can obtain a certain IPO amount no matter what the situation is. The disadvantage is that the stock price obtained by the company is lower than the issue price.

Sales assistance is between consignment sales and underwriting sales.Generally speaking, most of the IPOs of enterprises now adopt the form of underwriting sales, and rarely use the method of consignment sales or sales assistance.

"What do JPMorgan's investment banks think?" Zhou Fei asked.

"They naturally want to use the underwriting method. From their financial perspective, it is impossible not to see the market value of Tesla. As long as the shares are issued, they will definitely not worry about selling them. Whether they are retail or institutional investors, they will definitely It was snapped up in the primary market."

When an investment bank undertakes a company's IPO business, it will definitely evaluate the company's stock quality in advance, and choose the appropriate stock underwriting method and service fee based on the evaluation results.

It is no exaggeration to say that when any company under the Feichi Group is listed, the investment bank will not hesitate to choose the underwriting method, because anyone who has a little knowledge of the automobile industry knows what the words "Feichi Group" mean. This is the sign of high-quality stocks in the capital market!

"Do they have any other requirements?" Zhou Fei continued to ask. It is not difficult to guess that Tesla's stock is underwritten by way of underwriting, but Zhou Fei believes that investment banks such as JPMorgan will definitely have other requirements. .

"I didn't expect Mr. Zhou to know them quite well." Ma Huafu looked at Zhou Fei in surprise, and then continued, "In addition to requiring the use of underwriting, these investment banks also hope to obtain over-allotment right."

The so-called over-allotment right means that when the stock demand in the primary market exceeds the issuance amount, the underwriter has the right to issue a certain amount of additional stocks. , the underwriter can also obtain additional income.

Zhou Fei estimated that when Tesla contacted these investment banks, they had already thought about what conditions to set.

"Although I don't know much about finance, after all, I have met many people in this area. Of course, I know what these people are thinking. Besides, with Tesla's current situation, if it were me, I would I will put forward similar conditions." Zhou Fei replied with a smile.

"After meeting these people, we will talk to them slowly about the way of underwriting." Zhou Fei paused, then added.

(End of this chapter)