--%>
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 : When the dividend shows real money The

    The dividend is the part of the net income which the company distributes to shareholders. When the dividend shows real money, the net income is also real money. Is it true?

    		•
  • Q : Investors are irrational or naive

    Explain how companies with substandard financial history can draw the attention of investors. Are investors irrational or naive?

    		•
  • Q : Problem on raising new capital AB

    AB Corporation has 3 million shares of common stock selling at $19 each. It also contains $25 million in bonds with coupon rate of 8%, selling at par. AB requires $10 million in new capital that it can raise by selling stock at $18, or bonds at 9% interest. The expect

    		•
  • Q : Analysis on Stock Prices Using the last

    Using the last 3 years of closing stock prices on the first trading day of each month from January,  2010 through December 2012 for Apple (APPL) and the S&P 500 (market) for the same date range 1)    &n

    		•
  • Q : Problem on annual mortgage payment You

    You just took out a variable-rate mortgage on your new home. The mortgage value is $100,000, the term is 30 years, and initially the interest rate is 8%. The interest rate is fixed for 5 years, after which the time rate will be adjusted according to the prevailing rat

    		•
  • Q : Who introduced put–call parity Who

    Who introduced put–call parity?

    		•
  • Q : How can optimal capital structure be

    How can optimal capital structure be calculated?

    		•
  • Q : Understand and interpret financial

    Our purpose this week: learning how to understand and interpret financial statements. Assignment: The class should discuss all of the questions listed below as they rel

    		•
  • Q : Discounting Free Cash Flow or

    Which of these two ways is better: discounting the Free Cash Flow or discounting the Equity Cash Flow?

    		•
  • Q : Problem on rules of the International

    RainFlower Trading Limited is a wholesaler of electronic calculators in Hong Kong. It has been importing goods from a Philippine manufacturer for eight years. The Philippine manufacturer had accepted payments in advance in the past. Recently, because of political turm

    		•