Week 7 discussion board
Please discuss the following topics. Make sure to give YOUR opinions in your words!
1. According to an article on WSJ, Trading app Robinhood Markets Inc. expects its coming initial public offering to give it a market value of about $33 billion, lower than the level previously anticipated. The Menlo Park, Calif., company plans to sell about 52.4 million shares in the offering, and other stockholders would sell about 2.6 million, at a price between $38 and $42 each. At the midpoint of the offering range, Robinhood would raise about $2 billion. The shares are set to start trading late next week.
Based on the article, please discuss trends in Robinhood’s revenue growth. What factors have fueled it? Also, compare Robinhood’s prospective valuation to that of Charles Schwab. What accounts for the likely “premium” accorded to Robinhood? Finally, discuss the offering structure, including the differences in the classes of stock and the intentions of company insiders to sell shares in connection with the offering.
2. Finance chiefs across industries are facing higher costs as the economic rebound drives up demand for raw materials, components, energy, and transportation. Wages are also on the rise, adding to the expenses executives need to cover. Pandemic-related backlogs and shortages have created a supply crunch and the easing of lockdown restrictions has stoked consumer demand. The combination is sending inflation surging to levels not seen in more than a decade. Many of the current generation of chief financial officers have limited experience in managing inflation, following years of low-cost increases in the U.S. and elsewhere, making them seek past playbooks for strategies.
Please discuss the challenges facing CFOs in the current environment. How could an inflation forecast assist a CFO in planning for the future? What steps, beyond raising prices, might a CFO take in the context of rising inflation?
This assessment fulfills the following course objective(s):
- Meets the JMSB goal of critical thinking.
- Meets the JMSB goal of business knowledge.
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