Term
| Places to look for info on private companies |
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Definition
| Secretary of State website (occupational licensing boards, UCC filings, which shows when a business sells something to another business on credit) county records (register of deeds), Dept of Labor WARN act guy in your county (call him), OSHA (Occupational Safety and Health Admins), several websites offer info on non-profits (ex. Guidestar), Small Business Admins website, websites for credit unions and banks (ex. www.ncua.gov, www.fdic.gov) |
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Term
| places to look for news in 10-K |
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Definition
| mgmt discussion and analysis, risk factors, $ expenditures, share repurchases (if theyre buyin it they think it's cheap and expect it to increase), income statement |
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Term
| things to include in company earnings story |
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Definition
| whether or not analysts predictions were accurate, net income and its change (lede), equity per share (EPS), explain results (what product/practice did what, etc), how stock reacted/changed |
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Term
| 8-k filings and examples of when/why they're filed |
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Definition
filed for any significant financial impacts. examples: change in mgmt, change in accountants, bankruptcy/regulatory action, financial results, things that change stock price or revenue 5% or more, layoffs/downsizing, change in fiscal yr, off balance sheet transactions, delisting of stock by exchange, acquisition of assets.
**Companies have 5 calendar days to file 5-K after event |
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Term
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Definition
| Regulation Fair Disclosure -- passed by SEC in 2001, said if companies are disclosing infor that would change stock price it must disclose it to everyone at same time. Often done in conf calls where journos, shareholders listten to same call as investors, analysts |
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Term
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Definition
-for company's IPOs (when they begin trading shares on stock market).
-often amended several times per SEC's request -- called S-1As
-after filing S-1, SEC reqs companies go through quiet pd in public eye for 40 days
-also company usually hires I bank to do road show -- travel around and pitch stock to investors, read demand, set stock price, etc
-that I bank usually underwrites the IPO too |
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Term
| S-1 stories and what's needed in em (8 things) |
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Definition
-how much $ they wanna raise (lede)
-financial performance
-what they're doin w/ proceeds
-who's underwriting
-price per share
-risks
-company strategy
-compare stock price w/ book value of company (which is found in the 'dilution' section of 8-K, basically the value of assets sold divided by # of shares -- or how much each shareholder would get if divied up
-new ticker symbol company will trade under |
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Term
| the 2 stock prices in IPO |
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Definition
-offering price -- price @ which underwriters sell stock to initial investors
-opening price -- price @ which the stocks begin trading on the market |
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Term
| Profile story pre-write (who developed it, where to find info, what info's needed) |
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Definition
-developed at Fortune magazine in 1930s and 40s. Esp Carol Loomis
-read past several yrs of annual reports
-find out about early yrs of company/exec's involvment in company
-assess future -- success or not
-know history of execs, board
-find/see if bks written about company (authorized or not by company)
-look at old press releases, what's been written about it in media, industry newsletters, read all of latest SEC filings (esp mgmt discussion/analysis in 10-Ks)
-courthouse -- lawsuits, liens, real estate records, etc involving company/exec
-call former co-workers/colleagues/friends. Also competitors, suppliers, investors/analysts,
-if interviewing CEO, first talk to a few lower level ppl and work way up ladder
-figure out angle of story before interviewing CEO |
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Term
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Definition
-similar to writing short story -- needs beginning, middle, end. also conflict
-begin w/ one of 3 types of lede:
1-anecdotal
2-summary lede (needs a cause and effect)
3-event lede (w/ foreshadowing of rest of story) |
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Term
| typical company structure |
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Definition
board
^
Chairman <- CEO ->President
^
Chief Operating Officer
^
CFO <--> CMO <--> VP of PR <--> CIO
CIO = chief info officer |
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Term
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Definition
| crazy old lady that writes newsletter and shows up to annual mtgs and grills execs, CEOs |
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Term
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Definition
aka proxy statement, usually filed w/ SEC before annual mtg (though technically supposed to be filed whenever there's a shareholder vote)
-only place where public company discloses exec/board compensation on
annual basis
newsworthy parts:
-shareholder proposals - rarely passed, share=vote
-new directors
-change in auditors
-board business relationships -- biz conections, peer group
-stock ownership changes
-compensation committee report -- including summary compensation table |
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Term
| types of stock that execs get: |
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Definition
stock options -- opportunity to purchase certain # of common stock @ predetermined price over a pd of time. *Usually used as incentivve to get stock price higher b/c shares offered @ cheaper price than current price -> called "in the money"
if stock option @ price above current price -> called "out of the money"
-exec uses own $ to buy, decides when to exercise stock option (@ which pt a SEC doc filed)
*"option awards"(in SEC doc)- value of stock options @ end of yr if exec were to sell/exercise option.
-restricted stock -- when co. gives stock to employee and his/her rights to those shares are limited until those shares vest to em. Companies place restrictions on it.
*"stock awards" (in SEC doc) - value of restricted stock @ end of yr
*stock is in exec's name (doesn't have to buy em), but s/he cant trade or do anything with em |
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Term
| things to include in compensation story |
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Definition
-compare change in exec comp to company performance in that same yr
-used revenue, profit, and stock price to do so
-break down how comp is made up, and include execs full title/roles
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Term
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Definition
| When one company agrees to buy a controlling interest in a company. Doesn't have to be a 100% buyout |
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Term
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Definition
| When two companies agree to combine their operations into one company. Each company owns 50% of new company. |
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Term
| things to include in merger and acquisition story |
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Definition
-price of deal (per share also) and why in lede -- to reduce competition, gain tech/products, etc
-methods of buying: cash, stock, debt (or any combo of these)
-what is the exchange ratio (of shares)
-when will deal be done and who must approve transaction
-what is the price compared to similar trasactions in the industry
-how will it affect competition
-did trading/stock price change and how
****use S-4 filing |
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Term
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Definition
| Department of Justice and Federal Trade Commission. They look at effect on competition/marketplace and protect consumers from unfair business practices |
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Term
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Definition
-will buying company B immediately add to A's earnings, lower or do nothing until two years from now when it will add 10 cents per share?
-The acquiring company will disclose it in press release |
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Term
| 3 primary bankruptcy filings (w/ definitions) |
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Definition
-Chapter 11 reorganization -- most common, where a company or indiv. will enter into bankruptcy court protection and reorganize its debt. Will pay off some but not all of its debt. Some assets sold, but not all of it.
-Chapter 7 -– liquidation, when a company is going out of business. Everything is sold.
-Chapter 13 -– where indiv or corp agrees to repay all of the money that it owes. Long, drawn-out process. Court comes up with plan to allow it to figure out how – also provides some protection from debtors who have lawsuits, which become void when company files for Ch. 13 bankruptcy court protection. Commonly individuals – helps credit rating long-term. |
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Term
| documents/sources for bankruptcy story |
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Definition
-initial filing – lists amt of $ the company/indiv owes (liabilities) and their assets. Always a story here.
-creditors list –- must be filed 2-3 weeks after initial filing. Everybody that owed money by company, includes contact list with telephone #s. Largest creditors will be on the creditors committee, which negotiate with company on reorganization plan
-reorganization plan – plan between the creditors committee and company where company agrees to take certain measures. Also includes how much $ the company is gonna repay.
*-pre-packaged plan – where plan already organized before filing for bankruptcy court, saves money bc it speeds up process and saves attorney/accountant costs.
***none of this filed w/ SEC, except maybe 8-K announcing bankruptcy ct.
--Companies like to file their initial bankruptcy court filing after the court is closed by taking the filing to the judge’s house. Either get a clerk to call if something’s filed after close (@ 4:30) or go early in the a.m. to see if anything’s been filed overnight
-also get to know the attorney who represent the creditors committee
-administrative assistant for bankruptcy court judge |
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Term
| 2 types of creditors in bankruptcy filing |
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Definition
-secure creditors – first in line to get repaid. People/companies/banks that have let the company borrow $ but in return something has been put up as collateral. Bonds are secure creditors.
-unsecure creditors – most commonly stock holders, most end up getting nothing |
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Term
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Definition
| -DIP financing – Debtor In Possession financing. Basically when financial services companies and banks try to lend the company money during the court proceedings/protection so that it can eventually pay its creditors something. Banks/lenders wanna lend because they get repaid first. Typically the company or the lender will put out press release, also approved by judge in the case. |
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