Put your stock in the hands of the right institutional investors

Article Abstract:

Institutional investors are often perceived by corporate treasurers as being too quick to sell when a company is in trouble or is threatened by a corporate raider. The solution to the problem is not to reduce the percentage of stock held by institutional investors, but to influence the type of institutions that hold a company's stock. Corporate treasurers first need to realize that individual investors are not necessarily loyal. Having a significant number of institutional investors is not necessarily bad, because institutional investors tend to make more informed decisions. Corporate treasurers can identify institutional investors who would make good stock holders by examining the 13F filings on record with the SEC. All institutional investors with portfolios worth $100 million or more are required to describe all of their equity holdings on the 13F form.

Management, Investor relations, Institutional investments

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Share buybacks flourish under bear market conditions

Article Abstract:

Now is the time for companies to consider a stock buyback. Currently undervalued stocks can be bought back, reducing investor relations costs. Large tender offers or stock purchases on the open market can give companies greater control and the opportunity to resell at a higher price later. Companies with idle cash can avert takeovers with buybacks. Buyback techniques may or may not require SEC approval. SEC approval is not required for open market repurchases, but direct tender offers to shareholders do. Odd-lot repurchase programs do not require SEC approval. The odd-lot redistribution buyback is more complex, involving an SEC no-action letter. An important issue is the proper pricing of stock. One method is the price averaging model, tagging the stock price at market levels prevailing just before the sale.

Methods, Cash management, Stock redemption, Stock Market Crash, 1987

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Exchanges of capital offer flexibility, relief

Article Abstract:

Corporations can extricate themselves from uncomfortable financial situations or avail themselves of market movements by switching one type of financing for another. An exchange can be structured through SEC registration, which can take three to five months from the time an issue is proposed but which lends an air of legitimacy to the offer. An alternative to SEC registration is an exchange without registration, but it has a primary drawback of requiring the company to do most of the work and explicitly forbids investment bankers from soliciting investors. The exchange-of-capital experiences undertaken by Texas International Co and Consul Restaurant Corp are described.

Texas International Co., Consul Restaurant Corp.

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