W.R. Hambrecht + Co.
1999 | Case No. E62
The case gives background on the market for Initial Public Offerings (IPO) and William Hambrecht’s launch of W.R. Hambrecht + Co. to provide a new way of going public through the use of the Internet. The case begins with an introduction to IPOs, including what they are, why companies do them, and the process for conducting them. Then, William Hambrecht’s background and the formation of W.R. Hambrecht + Co. are discussed. The company was introducing a new way to go public, called OpenIPO, which allows broader access to IPO shares and a more economically efficient method of pricing IPO shares by utilizing the power of the Internet. Advantages and disadvantages of this new process are discussed. Finally, the case discusses the market reaction to the new company and the new process. Hambrecht is confident that customers, companies going public, will embrace this new process, but is concerned about the reaction from competitors, existing and powerful investment banks. He has a number of options on how to compete and partner with companies and he needs to decide how to partner with them and how to plan for the company’s growth.
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