Comments on: Starwood IPO Benefits Underwriters – Investors Take Losses http://zachstocks.com/2009/08/starwood-ipo-benefits-underwriters/ Dynamic Investments for Exceptional Traders Mon, 26 Jul 2010 12:25:18 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: Zachary Scheidt http://zachstocks.com/2009/08/starwood-ipo-benefits-underwriters/comment-page-1/#comment-7793 Zachary Scheidt Thu, 03 Sep 2009 21:34:56 +0000 http://zachstocks.com/?p=2052#comment-7793 A premium would imply that investors have confidence in management's ability to invest the capital. You could also argue that none of the investors should have committed capital if they didn't expect management to grow the portfolio. The secondary offerings you mention may reduce leverage (and we're finding out at the WRONG time that leverage is a killer. You're right - the deals don't exactly work to investors favor but they do help the underwriters and give managers a new lease on life. A premium would imply that investors have confidence in management’s ability to invest the capital. You could also argue that none of the investors should have committed capital if they didn’t expect management to grow the portfolio.

The secondary offerings you mention may reduce leverage (and we’re finding out at the WRONG time that leverage is a killer. You’re right – the deals don’t exactly work to investors favor but they do help the underwriters and give managers a new lease on life.

]]> By: AR http://zachstocks.com/2009/08/starwood-ipo-benefits-underwriters/comment-page-1/#comment-7790 AR Thu, 03 Sep 2009 19:30:25 +0000 http://zachstocks.com/?p=2052#comment-7790 How about all of these REIT secondaries that were going directly to pay off credit lines at the banks that were doing the offerings? They are getting rid of the credit risk and cha-chinging the underwriting fees. REIT investors loving it!(I'm winking at you Cohen&Steers!)Good money after bad. Is that the way capitalism is supposed to work? You could argue that STWD should get a slight premium to the rest of the space, as at least they are working with a clean slate. I guess....... Still a POS. How about all of these REIT secondaries that were going directly to pay off credit lines at the banks that were doing the offerings? They are getting rid of the credit risk and cha-chinging the underwriting fees. REIT investors loving it!(I’m winking at you Cohen&Steers!)Good money after bad. Is that the way capitalism is supposed to work?

You could argue that STWD should get a slight premium to the rest of the space, as at least they are working with a clean slate. I guess……. Still a POS.

]]> By: Zachary Scheidt http://zachstocks.com/2009/08/starwood-ipo-benefits-underwriters/comment-page-1/#comment-7710 Zachary Scheidt Wed, 19 Aug 2009 17:01:38 +0000 http://zachstocks.com/?p=2052#comment-7710 Did you participate in the STWD deal? Do you ever buy REIT's on the initial offering? I've found that while many IPOs offer exceptional trading opportunities, the REITS are usually much more attractive a few weeks to a few months after the deal is complete. Agree? Disagree? Indifferent? Did you participate in the STWD deal? Do you ever buy REIT’s on the initial offering? I’ve found that while many IPOs offer exceptional trading opportunities, the REITS are usually much more attractive a few weeks to a few months after the deal is complete.

Agree? Disagree? Indifferent?

]]>