While it is not often publicly vocalized, one motivation to take a company public through an IPO is to cash in during strong IPO “market environments” while transferring risk on an unknown future. Such might be the case with the recent announcement that an IPO is being planned on San Francisco 49ers’ star tight end Vernon Davis, bestowing on the athlete turned risk manager $4 million from the sale of securities while providing investors 10% of his future earnings. “Upside call on post career earnings” Running the math through his head, Buck French, CEO and founder brokerage firm Fantex Inc (OTCMKTS:ANFRL)…
Classic Risk Management: IPO on Football Player
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.