--%>
Assignment Help - homework help

Did you see Vueling case

Did you notice the Vueling case? How is this possible that an investment bank sets the objective price of its shares in €2.50 per share upon the 2nd of October, 2007, just after replacing Vueling shares at €31 per share in June, 2007?

E

Expert

Verified

It is factual. After placing the shares of Vueling at €30 per share in December, 2006 and at €31 per share in June, 2007 and the 2nd of October, 2007 and the investment bank set the objective price at €2.5 per share.

1st December, 2006. IPO of Vueling at €30 per share. The first day, closing price was €32.99 per share.

23 February, 2007. Maximum at €46.7 per share.

6th June, 2007. Placement of the 20.97 percent of the share capital of Vueling (shares of Apax) at €31 per share.

19th July, 2007. One of the placement banks recommends the selling at the objective price at €20 per share.

August 2007. Vueling admits not being able to fulfil the business plan: that the shares fall in 30%.

31st August, 2007. New objective price of Vueling: €12 per share.

3rd October, 2007. The same placement bank values Vueling at €2.5 per share. Quotation: €8 per share.

23rd October, 2007. The bank increases the value of a share from €2.5 at €13, and this even recommends to 'selling.'

28th December, 2007. The last quotation of year 2007 is the value of share from €8.95 per share.

   Related Questions in Corporate Finance

  • Q : Define stock variable Stock variable :

    Stock variable: It is a variable whose value is measured or evaluated at a point of time.

    		•
  • Q : Explain any indisputable model for

    Is there any indisputable model for valuing the brand of a company?

    		•
  • Q : Widgets You are required to submit a

    You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would generate $3,000,000 after the taxes were paid. The

    		•
  • Q : Expected return for a portfolio What is

    What is the expected return for a portfolio consisting of 200 shares of Nike, 200 shares of Home Depot, and 400 shares of Intel if their expected returns are 10%, 8% and 12% respectively, and their current prices are $25, $50, and $25 per share respec

    		•
  • Q : Which model was great breakthrough for

    Which one model was great breakthrough for side of finance theory?

    		•
  • Q : What is real gross domestic product

    Real gross domestic product: If GDP of a particular year is estimated or evaluated on the basis of the base year prices it is termed as real gross domestic product.

    		•
  • Q : Is it possible to use a constant WACC

    Is this possible to use a constant WACC in the valuation of a company along with a changing debt?

    		•
  • Q : Attributes of debt securities What are

    What are the Attributes of debt securities?

    		•
  • Q : Yield to maturity problem Jenny is

    Jenny is looking to invest in some 5-year bonds which pay annual coupons of 6.25 % and are presently selling at $912.34. What is the present market yield on these bonds? (Round to the closest Answer.) (1) 9.5%  (2) 8.5%  (3) 6.5%  (4) 7.5%

  • Q : Valuation & Merger analysis Problem

    Problem 21-1 Valuation Harrison Corporation is interested in acquiring Van Buren Corporation. Assume t

    		•