A matter of improving Insurance company balance sheets
Thanks for the SA reference, but I think you may have your facts backward. The insurance companies were sellers of VRSK stock; they did not retain any significant amounts, I believe. I don't know whether they much liked the idea of selling--I think it was more of a forced sale. One of the reasons I own the stock is that only Warren Buffett kept his shares.
Forced sale? LOL! Unload sale maybe. You seemed to have missed not all shares were sold yet. There are plenty of restricted shares and class B shares and stock options not to mention the number of shares were increased with a split just prior to the IPO. "In conjunction with the IPO, the Company plans to effect an approximately fifty-to-one stock split of both classes of common stock"
“We have happy selling shareholders and it’s good to see our new shareholders getting some good news right out of the shoot,” Verisk Chief Executive Officer Frank Coyne said today in an interview."
IMO this thing was "engineered" to improve the look of the balance sheets of the insurance companies - same as stated by the CEO himself. I wonder why that might be! Better than another bailout - or is it just prolonging the potential of another bailout?
“We were gratified that we were able to communicate what our company does,’’ Coyne said. “I think it’s a quality story.’’
Unlike many companies that go public, Verisk will not receive the proceeds of the public offering. The IPO was engineered to allow some of its largest co-owners, a collection of casualty and property insurers, to cash in their shares.
Coyne said taking the company public enabled shareholders to show a value on their balance sheets for their investment in Verisk.
“While we were a public company,’’ he said, “they were not able to show a value.’’
Susan Todd may be reached at firstname.lastname@example.org or (973)-392-4125"
I'm already out of VRSK with a profit, waiting for a re-entry point after this Q's earnings report. Do you know whether or when these additional shares will hit the market, or have they already? It would explain the recent softness.
Forced or unload sale, same difference. The insurance companies needed cash pretty badly (some were asking for TARP), WEB did not. Why sell a steady business with high profit margins and a locked-in customer base if you aren't hurting? So I'll go with WEB's judgment here. Plus, the insurance companies now can mark their remaining shares to a defensible market amount instead of some phantom "mark" they can't explain or justify. That does pretty up their balance sheets, even though they've lost a profitable asset in the process.
Class A common stock offered by the selling stockholders 85,250,000 shares
Class A common stock outstanding after the offering 113,076,100 shares (125,821,850 shares if the underwriters exercise their over-allotment option in full)
Over-allotment option 12,745,750 shares of Class A common stock from certain of the selling stockholders
Class B common stock outstanding after the offering 66,983,700 shares (54,237,950 shares if the underwriters exercise their over-allotment option in full)
Sale and transfer restrictions on Class B common stock The Class B (Series 1) common stock is not transferable until 18 months after the date of this prospectus and the Class B (Series 2) common stock is not transferable until 24 months after the date of this prospectus.
These transfer restrictions are subject to limited exceptions, including transfers to another holder of Class B common stock. See “Description of Capital Stock — Common Stock — Transfer Restrictions.”
Conversion of Class B common stock After termination of the restrictions on transfer described above for each series of Class B common stock, such series of Class B common stock will be automatically converted into Class A common stock. No later than 24 months after the date of this prospectus, there will be no outstanding shares of Class B common stock.
In the event that Class B common stock is transferred and converts into Class A common stock, it will have the effect of diluting the voting power of our existing holders of Class A common stock. See “Description of Capital Stock — Common Stock — Conversion.”
Use of proceeds The Company will not receive any proceeds from the sale of common stock in the offering.
... Unless the context requires otherwise, the number of shares of our Class A common stock to be outstanding after this offering is based on the number of shares outstanding as of September 15, 2009, giving effect to the stock split of fifty-for-one that will have occurred prior to the completion of this offering. The number of shares of our Class A common stock to be outstanding after this offering does not take into account, unless the context otherwise requires:
• 23,898,150 shares of Class A common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $9.38 per share; and
• an aggregate of 13,750,000 shares of Class A common stock that will be reserved for future issuances under our 2009 Equity Incentive Plan, including up to 3,177,650 shares of Class A common stock available for issuance to our directors, executive officers and employees in connection with grants of options upon the closing of this offering with an exercise price equal to the price of the shares sold in this offering.