Why Banks Are Changing the Way They Pitch IPOs

Why Banks Are Changing the Way They Pitch IPOs

Assessment

Interactive Video

Business, Other

University

Hard

Created by

Quizizz Content

FREE Resource

The video discusses the issue of analysts inflating earnings estimates to win business, reminiscent of past practices on Wall Street. It highlights the involvement of Eliot Spitzer and the creation of a 'Chinese wall' to separate analysts from investment bankers. The current IPO pitching process sees analysts under pressure to increase valuations, prompting banks to implement new compliance measures. The video also covers the Toys R Us case, where analysts felt pressured to inflate valuations, leading to a FINRA investigation.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the main reason analysts were accused of inflating earnings estimates during the dot-com era?

To increase their personal bonuses

To win business for their investment banks

To comply with government regulations

To gain media attention

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one of the measures banks are implementing to prevent analysts from inflating valuations?

Increasing analyst salaries

Reducing the number of IPOs

Logging conversations between analysts and issuers

Hiring more investment bankers

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the new IPO process, who is allowed to ask questions to the issuers?

Only the analysts

Only the investment bankers

Both analysts and investment bankers

Only the issuers

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was one of the reasons Toys R Us struggled to go public in 2010?

High competition in the market

Pressure on analysts to inflate valuations

Lack of consumer interest

Insufficient marketing strategies

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Who started investigating the Toys R Us case regarding inflated valuations?

The SEC

FINRA

The Federal Reserve

The Department of Justice