1. Equities

2. Private Companies vs. Public
Two main private corporate structures
Privately Held
LLC
Public structure
Shareholders
SEC and other regulatory commissions
What is better?
Why would a company become private?
There are two main corporate structures of private companies. The one is simply a corporation. This is where there are a select few owners or investors that each own part of the company. The corporation makes profits and those are distributed to the owners based on percentage of ownership.
Unlike a standard privately held corporation LLC differs, primarily from a tax standpoint. LLC has the same ownership structure, meaning that there are a few people who own the company. Instead of the company making money and filling for corporate taxes, the profits are passed through to the individual owners. These owners then file for income taxes based on their percentage of the corporate profits
Public structure is very different: a public company is comprised of many shareholders as well as institutional investors. All public companies are governed by the SEC along with other regulatory commissions
What

3. Public vs. Private Public Private Greater access to capital
Access to debt
Use stock as currency (Compensation)
Legitimacy
Private
Less regulation
Decisions are made by owners
Choose your investors
Limits downside risk

4. Private to Public IPO – Initial Public Offering
Raise capital through public markets
Shares + Fees
Cash + Valuation
Cash
Shares
Cash
Shares
Underwriter (i.e. Investment Bank)
Public Investors – Primary Market
Public Investors – Secondary Market
Private Company Shares

5. Stock Exchange National Exchange vs. OTC OTC
Can anyone name a national exchange?
Auction style market place
Many buyers and sellers
OTC
Order driven
Buyers > Sellers (Inventory)

6. Market Makers and Price Movement
Bid-Ask Spread
Bid Price – Seller
Ask Price - Buyer
Market Makers
Commission
Hold Shares, Immediate offset
Market Maker Spread

7. How the Market Moves.. = Highest Lowest - > Trade!
Offer to Buy
BID
Offer to Sell
ASK
Lowest
Highest
- > Trade! =
- > New Bid-Ask = $0.19
Explain market vs. limit

8. Shareholder Toolkit Dividends Splits Buybacks Corporate profit sharing
Make more affordable
Add liquidity
Buybacks
Management thinks undervalued
What does it do to EPS and price of remaining shares?
Price of Remaining Shares
EPS

9. Type of Shareholders Preferred Common Generally greater dividends
No voting rights
Common
Voting rights
Standard dividends
Payout last

10. Delisting and Liquidation
Voluntary Delisting
Buyout (i.e. NYSE:TSL)
Merger forms new public company
Involuntary Delisting
Below $1.00 for 30 consecutive days
Still Trades OTC
General failure to meet regulations
Bankruptcy

11. Liquidation Bank Loans Bondholders Preferred Shareholders
1st
2nd
Bondholders
3rd
Last
Preferred Shareholders
Common Shareholders

12. Types of Listings
Common stocks
Mutual funds
Index funds
ETFs
ETNs

13. Mutual Funds Bundle of stocks, bonds, etc.
Fees associated, % of investment, profit, or both
Actively managed by PM
Priced at end of day based on NAV

14. Index Funds Portfolio constructed to match index Broad market exposure
Low operating expenses
Low portfolio turnover

15. ETFs Exchange Traded Fund Track index, commodity, etc.
Bought and sold like common stock
Do not price based on NAV (Sold at premium or discount)
Higher liquidity
Tracking error due to buying and selling of underlying

16. ETNs Alternative to ETF Track an underlying asset
Subordinated debt issued by a company (Barclays)
Not backed with collateral
Tied to credit risk of issuer
Default risk very much alive
Does not rely on buying or selling of underlying
Priced at maturity based on underlying

17. Market Cap Market cap is the market value of a company
Outstanding shares * Share Price
What are some of the largest companies by market cap?

18. Top Ten

19. News Recap

20. Trump and Peso
Trump’s immigration plan and renegotiation of NAFTA threatens the Mexican Peso

21. Trump and Volatility
The possibility of non-partisan, unprecedented legislation has brought with it fresh uncertainty within financial markets
VIX = 100*sqrt(30-day expected variance on S&P)
Expected 30-DAY variance is calculated by options prices on S&P for 30-day range