March 15, 2017
Oh, Snap! Black Investment Firms Must Be Involved in More Tech IPOs
There’s still quite a bit of buzz about the $28 billion initial public offering of Snap Inc., parent of the mobile app Snapchat. Considered one of the largest U.S. tech IPOs during its market debut on March 2 — despite news reports from Marketwatch.com, among other sources, that “the thrill has faded†for investors as its share price slides from the initial trading day close of $22.07 – BLACK ENTERPRISE has focused on another element: Participation of minority underwriters.
According to CNBC.com, Wall Street investment banks generated roughly $85 million in fees with Morgan Stanley and Goldman Sachs leading the pack. Only two minority firms were included in the transaction: Samuel A. Ramirez & Co. and BE 100s financial services firm Williams Capital Group L.P. (No. 3 in taxable securities with $2.2 billion in lead issues and No. 5 with $18.9 billion in lead issues on the 2016 BE INVESTMENT BANKS list). Neither firm was chosen as senior or co-managers on the transaction.
The inclusion of Ramirez & Co. and Williams Capital was, appropriately, among the conversations at last month’s Rainbow PUSH Wall Street Project Summit, the vehicle iconic civil rights activist Rev. Jesse Jackson launched 20 years ago to enable minority and women business enterprises (MWBEs) to fully participate in the capital markets.
For more than a decade, minority firms have been pushing to gain equity and bond underwriting assignments from Silicon Valley companies. With the aftermath of the Snap IPO, we decided to take a look at the track record of the engagement of African American investment banks within the tech sector. Taken from the 20th Anniversary Wall Street Project Report Card booklet, produced by BLACK ENTERPRISE and written by BE contributor Frank McCoy. As you will see, much more progress needs to be made. To paraphrase John Rogers, CEO of BE 100s asset manager Ariel Investments, not enough black financial services firms have achieved their “Jackie Robinson moment.”
The following represent significant Silicon Valley transactions involving BE 100s firms:
2004
Google’s $2.7 billion IPO: Blaylock & Partners — one of the leading BE investment banks at the time – served as a co-manager of the public offering of 14.159 million shares of Class A common stock. Underwriters included two other then-BE 100s companies M.R. Beal & Co. and Utendahl Capital.
2012
Facebook $104 billion IPO: BE 100s firms CastleOak Securities, Loop Capital, M.R. Beal & Co., Williams Capital and Blaylock Robert Van were among investment banks that participated in the transaction.
2015
February
Microsoft Corp. announces an offering of $10.75 billion debt sale with CastleOak Securities L.P., Loop Capital, and Williams Capital as co-managers of the deal.
March
BE 100s investment banks Loop Capital and Williams Capital co-manage IPO for online marketplace ETSY.
October
Microsoft $13 billion notes: Co-managers include CastleOak Securities, Loop Capital, and Williams Capital.
Loop Capital and Williams Capital are among participants in Hewlett-Packard’s $15 billion offering, enabling its split into two companies: HP Inc. and Hewlett Packard Enterprises.
2016
March
Loop Capital and CastleOak Securities co-manage three-tranche, $3.5 billion bond offering for Apple Inc.
August
Microsoft’s $19.75 billion bond offering: Co-managers include BE 100s perennials CastleOak Securities, Loop Capital, Siebert Brandford Shank, and Williams Capital.