3. How favorable is the market climate for the TRX IPO?
4. How does the strategic repositioning of the company and the use of the IPO as an exit for minority shareholders affect the attractiveness of the IPO? The strategic repositioning of TRX in respect to transitioning away from customer care would most likely affect the attractiveness of the IPO in a negative way. TRX was concerned with the price and sustainability of the company in the IPO territory to begin with and already proposing prospect to exit a sector of the business this early in the game does not seem like a good recipe for success. TRX wanted to transition from customer care to cut operational costs to try and build up the bottom line. Going back to the attractiveness of the IPO, Davis was faced with two options to prove the attractiveness. The first was to go ahead with the IPO and settle for a lower share, or wait and try and raise more capital to better sustain the IPO in later days. If Davis decided to go with option number one, and go ahead with the IPO, then the strategic repositioning would have to be done in a fast and efficient manner. With any IPO, the spot light is on it and any negative attention could cause the price to tank some time after its IPO. TRX has already had a difficult time preparing and wondering about its sustainability so the attractiveness of the repositioning does not seem like a good one. TRX proposed that their IPO would act as an exit for minority shareholders. First, we must ask what are minority shareholders? According to Saboor H. AbdulJaami, “A corporation that has a small number of shareholders is a “closely held” or “close” corporation. A closely held corporation’s shareholders are usually divided into two groups: (i) shareholders that have a controlling interest in the corporation; and (ii) shareholders that do not have a controlling interest in the company. The corporate shareholders that do not have a controlling interest in the company are known as...
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