Chapter 315: Profit Sharing
Shirakawa Electric is valued at 586.5 billion yen, and 35% of its outstanding shares are issued, which works out to 290 million shares.
How to put these 290 million stocks into the market and in what form they are issued is a complex subject.
As a listed company, Shirakawa Electric will certainly not directly participate in the issuance of stocks. Its responsibility is to convert its assets or product prospects into tradable virtual stocks.
These stocks are a quantitative representation of the value of a business and can be purchased and freely traded by the public.
Newly listed stocks of Shirakawa Electric are generally invested in the primary market or secondary market through intermediary institutions.
These intermediaries are similar to transaction windows, or sales roles such as wholesalers and brokers.
Dai-ichi Kangyo Bank, Nomura Securities and Kitato Bank, which were sitting in the conference room at that time, played such roles.
As underwriters of stocks and bonds, they are responsible for placing Shirakawa Electric's stocks into the trading market through various means.
There are generally two ways for underwriters to issue stocks.
Underwriting issuance method and agency issuance method.
As the name suggests, underwriting means that securities firms purchase all or part of the newly issued stocks of listed companies at one time and advance the entire capital equivalent to the stock issue price.
The securities dealer then sells the purchased stocks in the trading market.
Of course, the stock prices that underwriters purchase from listed companies are all traded at the lowest issue price or even at a more favorable price.
When the underwriters resell these underwritten stocks in the primary and secondary markets, the prices are set by themselves.
This is equivalent to making a profit from the price difference, buying low and selling high.
However, this underwriting issuance method is generally carried out among newly listed small and medium-sized technology companies.
Most of these companies are in urgent need of funds, so when faced with a one-time payment from the underwriters, they are more willing to package their stocks to them and leave with the money themselves.
Underwriters who are able to carry out stock issuance business are mostly well-funded, and are more willing to use the underwriting method to issue stocks for companies they are optimistic about.
Of course, if the number of shares issued by a newly listed company is too large, several securities firms can jointly underwrite it.
Another way of issuing stocks, agency issuance, is the opposite of underwriting issuance.
The entity involved in agency sales is the listed company itself, but it is carried out by the underwriter.
The income from stock issuance belongs to the listed company and has nothing to do with the underwriter.
As middlemen, they simply earn a handling fee or a very low commission.
Whether it is underwriting or agency distribution, there are pros and cons.
Underwriting can help listed companies raise the necessary operating funds in a very short period of time, but this is a one-time transaction and subsequent stock gains have nothing to do with it.
The advantage of agency issuance is that the overall value of the stock will be higher than the issue price initially set by the company, and more funds can be raised.
But the disadvantage is that this cycle will be relatively long and there are certain risks.
If the company is not favored and its stock price falls below the IPO price, the financing obtained from the stock issuance will be greatly reduced.
In short, the specific issuance method needs to be determined based on the company's situation, which is a two-way consideration between listed companies and underwriters.
As for Shirakawa Electric's stocks, to be honest, Dai-ichi Kansai Bank would like to buy all of them at once.
Because he knew that the stock price of Shirakawa Electric would definitely not be only 700 yen.
Not to mention its super profitability, just the future development plan that the other party just distributed is a delicious and sweet pie.
Regardless of whether they can get the cake or not, most investment institutions just buy into this.
Take this financial statement and future plan and start boasting about it. I believe this stock will be easy to sell.
But... Ichiro Watanabe looked at Takashi Yanagidani who was also looking at him with a burning gaze, and Hiroshi Arai who was sitting upright, and he gave up the idea of swallowing all the Shirakawa Electric shares in one gulp.
We are not fools. Didn’t we just spend hundreds of billions for this moment?
"Ahem~" Watanabe Ichiro cleared his throat, "Regarding the underwriting of Shirakawa Electric's shares, what do you think, Shirakawa-san?
I have just read the plan you have drafted, and it seems that future research investments will require a large amount of funds.
How about it? Consider underwriting the offering.
If we are responsible for the underwriting, Shirakawa Electric can obtain 205.2 billion yen in financing at one time.
With this money, many projects can be started immediately, and the earlier they are developed, the earlier they will produce results.”
After saying that, Watanabe Ichiro looked at Shirakawa Kaede eagerly, and his naked eyes were always tempting the other party to agree to such conditions.
It's a nice idea. If Baichuan Feng hadn't done some research in advance, he might have been tempted.
After all, with 205.2 billion yuan in funds at one time, many projects that have been in mind can be launched.
But now... Baichuan Feng smiled very politely.
“What Watanabe-san said does make some sense, but Shirakawa Electric is not under much financial pressure at the moment.
Why don’t we discuss the specific distribution method and find the most optimized solution? "
Hearing Shirakawa Kaede's answer, Watanabe Ichiro sighed silently in his heart.
It's not that easy, come to think of it. With Arai, the other party is no stock market novice.
"In that case, why don't you all tell us what you think and how many shares you can underwrite?"
No matter what, nearly 300 million shares will be issued through these three companies.
Regardless of whether it is underwriting or agency sales, all three underwriters will make money, the only difference is how much they make.
Baichuan Feng did not participate much in the following discussion.
Oh, it can’t be called a discussion, maybe it would be more appropriate to say an argument.
For them, stock underwriting means profit distribution.
How can we give in easily when it comes to matters of interest? We are arguing with each other until our faces turn red and our necks become thick. There is no trace of etiquette at all.
The tens of billions of dollars that Shirakawa Electric previously invested in the company may not be recovered in a short period of time.
However, if the stock underwriting is handled well, the profits can easily reach tens of billions.
This is equivalent to the tens of billions of dollars invested previously being recovered instantly. The remaining Shirakawa Electric shares are net profit.
Faced with such huge profits, no matter how good your self-cultivation is, it will be useless.
Whoever speaks louder has more power. With their beards and hair standing up, you would have thought they were going to fight.
Baichuan Feng was sitting next to them and was given a headache by the noise.
Especially during the arguments, there are so many professional terms mixed in, which is really overwhelming.
However, the most difficult task is still Arai Yu, who has to fight for the interests of Shirakawa Electric and Kitato Bank at the same time.
From the perspective of stock issuance, Shirakawa Electric and Kitato Bank are on opposite sides.
Occasionally, Ichiro Watanabe and Takashi Yanagidani would ask him bluntly, which side are you on?
Faced with their aggressive eyes, Arai Yuto almost went crazy.
In the end, Baichuan Feng couldn't stand their quarrel in the vegetable market anymore , so he acted as a mediator and asked both sides to take a step back.
In order to appease them, Shirakawa Electric's shares were distributed through a mixed underwriting and agency sales approach.
Although Baichuan Feng also knew that his own stocks might rise, the profits should be shared.
As I said, you can’t eat alone.
Shirakawa Electric successfully went public and its shares were sold, so he had actually achieved his goal.
As for the price difference between the middlemen, he didn't want to hold on to it, that was not the goal of Shirakawa Electric.
After all, stock underwriting is a financial game, not the real industry he is good at.
Finally, with Baichuan Feng's nod of approval, 70% of Baichuan Feng Electric's circulating shares will be issued in the form of underwriting, and the remaining 30% will be changed to agency sales.
Of the 70% underwriting share, Dai-ichi Kangyo Bank took 40%, Nomura Securities took 20%, and Kitato Bank took the remaining 10%.
After all, Dai-ichi Kangyo Bank was the main driving force behind Shirakawa Electric's listing, and it was also the first financial institution to establish a relationship with Shirakawa Electric.
Moreover, not to mention the current share ratio, just the fact that he has settled a lot of things for Shirakawa Electric makes him deservedly the biggest share.
As the largest securities firm in Neon, it is the largest, no doubt about it.
It is only right that Nomura Securities gets 20% of the profits, as they have a unique advantage in the stock distribution channels.
In addition, they also solved many personal problems for Shirakawa Kaede. All of Shirakawa Kaede's more than ten properties in Tokyo were acquired through their introduction.
These properties are not ordinary apartment houses, they are super luxury homes that belong to another class.
There are various styles, including retro, western and modern ones. And the designs are basically from famous artists, most of which are out of stock.
As for the remaining 10% that Kitatoshi Bank took, to be honest, it was only given because of Shirakawa Feng's face.
Otherwise, for Dai-ichi Kangyo Bank and Nomura Securities, Kitato Bank would not be qualified to sit here.
However, a 10% share is enough for Kitato Bank, and it cannot take any more.
Underwriting is a one-time deal for Shirakawa Electric, but after taking the order, the underwriter still has to find buyers to sell it.
Dai-ichi Kangyo Bank and Nomura Securities certainly have no shortage of channels. They have a large number of domestic and foreign clients behind them, and they all cooperate in investment.
Although Shirakawa Electric has issued a lot of stocks, it has no trouble selling them.
But for Kitato Bank, one tenth of its shares are close to 30 million shares, with a market value of about 20 billion, so it will take some effort to sell them.
However, no matter what, everyone got a share of the underwriting that satisfied them.
After all, Shirakawa Electric has unlimited potential, and the financial community has long been paying attention to this dark horse.
Underwriting his stocks is almost a sure-win deal. What could Dai-ichi Kangyo Bank and Nomura Securities be dissatisfied with?
For the remaining three levels of stock agency sales, everyone just makes a commission, so the distribution is very harmonious.
Even considering that Kitato Bank received relatively little benefit, Dai-ichi Kangyo Bank gave it a little more, just like giving it some soup.
The commission for agency sales usually does not exceed 0.3%, and the revenue from 30% of the circulating shares adds up to less than 200 million yen.
Compared with the profits from underwriting, this is nothing.
Soon, the 300 million listed shares of Shirakawa Electric were divided up.
This is the feast for Dai-ichi Kangyo Bank and Nomura Securities. As for the profits from investing in Shirakawa Electric, to be honest, in their minds, their importance is far less than that from stock underwriting.
Now that the profits have been distributed, it’s time to talk about the specific operations of Shirakawa Electric’s listing.
Isn’t it a bit funny to think that the listing application has not even been submitted yet, but the interests from all aspects have already been divided up.
