Raising Capital
Last week we wrote about Greenlight Capital’s lawsuit against Apple Inc. The hedge fund manager David Einhorn filed the lawsuit to contest Apple’s proposition to eliminate the board’s ability to issue preferred shares without shareholder approval. Today, Apple CEO Tim Cook called the lawsuit a “silly slideshow” while speaking at a Goldman Sachs investor conference.
Cook noted that the disagreement between Einhorn and Apple stems from a proposal on Apple’s proxy statement which it filed with the SEC in December. The crux of the dispute centers around how to issue preferred stock and who is able to approve new shares.… Read the rest
We’re following up Thursday’s post about Apple’s attempt to prohibit the company from being able to authorize preferred stock by amending its charter documents with this post, which discusses some of the general characteristics of preferred stock and some of the key terms that affect the value of preferred stock.
General Characteristics of Preferred Stock
Preferred stock is often considered a hybrid security as it offers features of both bonds and common stock. For example, preferred stock is like a bond in that it typically has a fixed-percentage dividend, and it is… Read the rest
According to a proxy statement issued by Apple Inc., the computer (and mobile device) giant has announced that it does not intend to issue preferred stock in the future and believes it is appropriate to eliminate an existing provision permitting the issuance of preferred stock at its discretion. The proposed amendment to the company’s governing documents would require Apple to seek shareholder approval prior to issuing any preferred stock in the future.
Greenlight Capital Inc.’s David Einhorn is protesting the amendment. Read the rest
I read a Wall Street Journal article today about the recent investigation into websites claiming to be crowdfunding platforms. Of the reported 9,000 websites that contain the word “crowdfund” in their website names, the North American Securities Administrators Association (NASAA)—the organization that represents state securities regulators—has investigated roughly 2,000, and plans to give a closer look at 200 of those.
Why the investigation in the first place? Well, many securities regulators are concerned… Read the rest
The Securities and Exchange Commission (SEC) released its annual financial report recently. At various points throughout the report, the SEC notes that it has worked and will continue to work to implement the JOBS Act in a quick, pragmatic manner. Also, the report points out that the SEC will attempt to maintain the congressional intent behind the Act in its rulemaking.
The Commission stated in its Management Discussion and Analysis report that it will work to implement the JOBS Act in a “practical… Read the rest
Last week we wrote about the Financial Industry Regulatory Authority (FINRA) announcing the creation of a form for prospective funding portals. Just one week later, FINRA has issued the voluntary interim form for funding portals, which is designed to collect information from prospective crowdfunding portals under the JOBS Act. Those prospective funding portals may voluntarily submit information about their company, and FINRA will use the information it receives to develop rules specific to the regulation of crowdfunding portals.
Once… Read the rest
Flashback to April 5, 2012: President Obama puts pen to paper and signs the Jumpstart Our Business Startups Act (the JOBS Act). The President declares that startups and small businesses will “now have access to a big new pool of American investors—namely the American people.” Entrepreneurs rejoice as the potential impacts of this bill could be huge for startups and small businesses. The bill provided a framework and the SEC was handed the reins to draft rules that would govern much of new legislation. The SEC was given a 90-day deadline to implement the JOBS Act.
Flash forward more than… Read the rest
In early April 2012, President Obama signed the JOBS Act into law. The goal behind the JOBS Act was to ease federal regulations in order to make it easier for smaller companies to obtain funding. Recently, there’s been a rising interest in the impact of the JOBS Act, focused mainly on “crowdfunding”—which, at least for purposes of this article, refers to the funding of a company by selling small amounts of equity to many investors through online intermediaries.
Title III of the JOBS Act (the crowdfunding portion) allows for… Read the rest
The frustrations have been loud and clear from funding platforms, investors, and bloggers alike regarding the SEC’s failure to implement rules governing online fundraising under the JOBS Act. The SEC has been dragging its feet and has missed just about every deadline that was set for it to enact the regulations that will allow investors and fundraisers to connect via online funding portals. However, in early December FINRA took a small step in the right direction.
The FINRA Board of Governors met to discuss a number of regulatory issues, including funding portals and the… Read the rest
Mergers and Acquisitions
Sprint Offers $2.1 Billion for Clearwire
The mobile giant Sprint Nextel Corp. offered $2.1 billion to purchase the remaining 50 percent of Bellevue-based Clearwire Corp. Who owns the other 50 percent? Sprint.
Sprint is offering $2.90 per share to buy the 700 million outstanding shares, according to the SEC filing. As a result, Clearwire’s shares jumped during early trading, up 35 cents to $3.10. This offer comes just months after Sprint purchased Clearwire’s co-founder, Craig McCaw’s shares.
Best Buy Gives Founders More Time to… Read the rest
