Oreninc Blog

Oreninc Blog

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The Facebook IPO

The Facebook IPO

Facebook is paying 1% in fees for its proposed IPO (Initial Public Offering), and the underwriters are expected to make between $50 million and $100 million to take the company public. In Canadian mining finance terms, that is a punch in the gut. The average deal we tracked in 2011 paid underwriters 9% in fees, 6% in cash and 3% in options. If Facebook were a mining company completing an IPO, the profit from the offering would have rocked some banker's world.

Some of the discount in fees results from Facebook being a status IPO; every bank wanted the deal because Facebook is a household name the world over. Some of the discount is also due to size. The deal is so large that even lower fee levels pay well. In general, however, the huge fees junior mining companies pay versus other companies elsewhere in the world reinforces the pain of the mining finance industry.

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The Case for 55 mpg

The Case for 55 mpg

      God Bless America, but why is the government so obsessed with the latest technology fads? When it comes to energy, we should be rewarding results and efficiency,...
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Selecting an Underwriter

Selecting an Underwriter

      An underwriter acts as a gatekeeper between institutions and companies. Some would argue that underwriters are not important, but we disagree. Underwriters perform the vital functions of...
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Why does liquidity matter?

Why does liquidity matter?

      Many companies wonder why liquidity and volume of daily share trading matter when they are looking to raise money. The answer is: institutional investors need liquidity. They...
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