Project for CIB

LUISS Business School
 

This assignment, counting for 40% of each student's grade, is intended to provide a somewhat more experiential opportunity for students. Unfortunately, current conditions restrict the availability of such opportunities, so this list is rather short now. Students may work on any of the projects described below, subject to the conditions also described below. Certain projects may be undertaken by groups; such projects are listed below. Since groups have been pre-assigned before the term began, they should sign up for one of the projects listed below. 

Groups will list each of their members' names together in an email sent to the course instructor identifying the selected case. The projects are offered on a “first-come, first-serve” basis; in particular, only a single group may present any one of the eight cases. Students should inform the instructor by May 13 by email at jteall@jteall.com (and receive confirmation) of their intent to complete a given project as part of a group, identifying the members of their proposed group.

Thirteen projects are listed below from which groups of students may select.

The first nine projects are case studies involving actual banks or public offerings of securities. Groups of students may select from among these cases to present one to the class on dates designated on either May 24 or May 26. In-class presentations should offer screen-based presentation material, which should also be submitted to the course instructor. The cases will be assigned on a "first-come, first-served" basis. Only a single pre-arranged group of up to 4 members may present each of the cases.

The tenth project is a trading project, for which students can obtain additional information from the course instructor and at the Trading Project page.

The eleventh project requires the creation of an IPO prospectus for a hypothetical company seeking to go public. Project 10 will be documented with a paper.

Projects 12 and 13 will be spreadsheet/VBA-based and is likely to be facilitated if students wish to learn some very elementary VBA, which is described elsewhere on the course web site.

While work on the project is expected to be original, any material used for it must be carefully documented and cited as per LUISS University and LBS regulations. Students should carefully cite any work, paper, book, article, electronic communication or software, whether published or unpublished that was used as a reference for their project. Any material that was copied into their project must be appropriately footnoted and cited. Authors of term papers should take great care in ensuring that their papers are well-written and conform with appropriate style guidelines. Professionalism in writing style and quality of presentation will count towards the grade for the project. The project paper and electronic deliverables will be due before 9:00PM on June 4 (unless otherwise stated, such as with in-class presentations), and should be submitted by email at jteall@jteall.com.


Cases:

    These eight cases include an ongoing scenario involving a troubled Italian bank, a Chinese IPO firm, an Italian luxury automobile/brand IPO, two car sharing services, a failed IPO and a few others. A single group comprised of up to 4 members may select any one of these eight cases to present to the class on the dates designated in the course syllabus. Presenters should produce for their classmates (and course instructor) slides, notes or other relevant printed materials for study purposes.

1.  Case Study/Presentation: Banca Monte dei Paschi di Siena
     Banca Monte dei Paschi di Siena is presently the oldest continuously operating banking institution in the world. However, the institution currently exists in a state of financial distress, with failure potentially looming. Students electing to work on this case should be in a position to learn about financial institutional practice and failure by examining the the recent history of this institution. There is ample material on-line and recent news media describing the institution, its past and its struggles. The purpose of this case presentation/paper is to understand the institution's practices, to carefully examine the history leading to its current condition, to sort out its possible outcomes and to make recommendations to improve its likelihood of success. The presentation should include discussion of, but not be limited to the following:
  1. Provide a detailed background for the causes of the institution's financial distress.
  2. Detail the effects of the impact of various regulators on the bank crisis, including discussion of possible runs on the bank, contagion, etc.
  3. Discuss the seeming relationship between bank practices and subsequent bank instability.Discuss the balance sheet of the institution in the years leading to its failure. Compare its balance sheet to those of competing institutions.
  4. Discuss regulatory implications of this ongoing scenario.

2.  Case Study/Presentation: Ant IPO
     Jack Ma and the Alibaba Group, a large Chinese web services firm, implemented the largest IPO in U.S. history in 2014. There is ample material on-line describing Alibaba, its past, its IPO and its business model. Jack Ma followed up this IPO with an affiliated and even larger IPO attempt of the Ant Group in 2020. This IPO failed because of pressure from the Chinese government. What were the controversies and regulatory backlash surrounding and behind the Ant Group IPO? hat might be the outlook for the Ant Group's future as a public company?

3.  Case Study/Presentation: Ferrari IPO
     Ferrari, a maker of luxury automobiles and luxury brand, was spun off by Fiat Chrysler. There is ample material on-line describing Ferrari, its past, its IPO and its business model. The purpose of this case presentation is to use the Ferrari IPO to illustrate many of the qualities of a typical IPO, despite the firm's many unique characteristics. The presentation should include discussion of, but not be limited to the following:

  1. Provide a brief background for Ferrari and its status as a unit of Fiat Chrysler.
  2. Detail the Ferrari IPO share price performance for the firms first day, first week, first month and for trading since.
  3. Discuss underwriter compensation, the retention and later allocations of shares among investors.
  4. Discuss more interesting effects of the company's new status as an independent company on its operations and industry postion. 
4.  Case Study/Presentation: Spotify DPO
     A direct listing is a type of direct public offering, which, after appropriate regulatory and market/exchange approval, essentially declares its existing shares to be publicly traded, at which time, shares are listed on the exchange that has accepted them for trading. Spotify, a multi-national European "fremium" music and video streaming service is currently going through a DPO of its stock. The presentation should include discussion of, but not be limited to the following:
  1. Provide a brief background of Spotify, its history and its need for a public offering of securities.
  2. What makes Spotify a better candidate for a DPO than typical firms listing their securities?
  3. Discuss regulatory aspects and implications of the DPO.

5. The Lyft and Uber IPOs
    Here, we have two different scenarios, occurring at roughly the same time and involving firms in very similar lines of business. But there are a number of significant operating and financial differences between the two firms. After introducing the two firms and IPOs, focus on how do these similarities and differences manifest themselves in the companies' approaches to their IPOs, how the IPOs are received by the market and other stakeholders, etc.

6.  Case Study/Presentation: WeWork IPO

    WeWork is an interesting example of an IPO that simply did not work. The company had a unique take on a business model, strong backing from a well-known bank, a highly visible CEO, yet failed due to a variety of other issues, including several related to corporate governance. As of early 2021, the firm intends to make a second attempt at an IPO, this time through a SPAC. After a brief introduction, this presentation should focus on the period extending a year before the original planned IPO and the months that followed, along with updates on its current efforts to return to the market.

7.  Case Study/Presentation: Robinhood IPO
    After a winter of bad publicity and significant controversy, Robinhood, a retail broker with many smaller client accounts made plans to file for its IPO in the Spring of 2021. As Robinhood claimed to seek "democratization" of securities markets through its trading platform and commission-free trading, it claims that its entry into IPO markets will work towards democratization of IPO markets.

8.  Case Study/Presentation: 23andMe IPO
    23andMe, one of the originators of at-home DNA testing technology plans a second quarter, 2021 IPO through a SPAC with ties to Richard Branson. 23andMe has obtained U.S. FDA approval for its testing kits, and has created some controversy with respect to privacy issues.

9.  Case Study/Presentation: Coinbase IPO
    The April 2021 IPO of Coinbase stock has been creating quite a stir in financial circles. Coinbase listed its shares on Nasdaq, and was a particularly interesting candidate to conduct its DPO (direct public listing) because of the volatile history of its primary business lines, bitcoin and other cryptocurrencies. The volatility of these markets, made it difficult to value this cryptocurrency exchange. Many analysts valued the company as high as $100 billion, higher than the values of any other major U.S. securities exchange.

Experiential Exercises: Trading under Risk Constraints:   

10. The Trading Projects (Two separate projects)
Students wishing to do a trading-based project should link to the Trading Project page for a fairly lengthy description.

11. IPO Mock Prospectus
      Prepare a (mock) prospectus for distribution to the appropriate E.U. or U.S. regulatory authority and the general investing public on behalf of an IPO offering for a chain of family restaurants. The purpose of the IPO is to raise $45,000,000 to open 50 new sites though out the either Middle-Atlantic/New England region of the U.S. (or, alternatively, throughout Italy, France, Belgium and the Netherlands). The IPO should conform to current SEC (or EU and member country; e.g., European Prospectus Regulation) regulations. In addition, a risk analysis should be performed on the company and a valuation should be performed on the shares to be offered.  Also, the following might be helpful for tracking down sample prospectuses: https://www.sec.gov/edgar/searchedgar/companysearch.html. (limit: 2 groups with 1-4 students each)

12. Fixed Income Portfolio Dedication
          This is a more quantitatively-oriented project, enabling the student to create a practical and usable automated spreadsheet application package. The user of this Excel spreadsheet package should be able to input relevant price and contractual information from coupon or pure discount bonds to hedge against a fixed cash flow stream. The file should be able to handle data for up to thirty bonds making interest payments on either an annual or semiannual basis. Cash flows from these bonds will be matched against cash flows of an equivalent series of cash flows associated with institutional liabilities. Allowing for matrix inversion with potentially many sizes of matrices may require a little creativity (VBA or the Excel Offset function might be helpful here). Students are expected to develop "user-friendly" and entirely original spreadsheet files of professional quality capable of accomplishing this task.  (limit: 2 groups with 1-4 students each)

13. Fixed Income Portfolio Immunization
          This is a more quantitatively-oriented project, enabling the student to create a practical and usable automated spreadsheet application package. The user of this Excel spreadsheet package should be able to input relevant price and contractual information from coupon or pure discount bonds to hedge against a fixed cash flow stream. The file should be able to handle data for up to thirty bonds making interest payments on either an annual or semiannual basis. Portfolios of bonds will have their durations and convexities matched against durations and convexities of a series of cash outflows associated with institutional liabilities. Allowing for matrix inversion, if it is necessary for your configuration, with potentially many sizes of matrices may require a little creativity (VBA or the Excel Offset function might be helpful here). Students are expected to develop "user-friendly" and entirely original spreadsheet files of professional quality capable of accomplishing this task.  (limit: 2 groups with 1-4 students each)

Paper - Based Projects

These written projects all involve firms in the financial services industries (including the IPO projects that involve investment banks). All Papers relying on materials prepared by others must have a bibliography and footnotes as appropriate. Citations must be explicit and appropriate. 




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updated 04/26/2021