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There's a phrase in Russia-related finance circles "the Renaissance-style IPO" - meaning stock that is floated at the peak of valuations that are hardly explainable even by the wildest stretch of imagination and financial modeling (as an investment bank you need to please the selling shareholders - they approve the payment of your fees...) - so after placement at wild multiples the stock goes down like a lead balloon and loses - at best - 50% of its value in the first half year since IPO. Two examples that gave rise to the apt phrase are Protek Pharma and Russkoe More (Russian Sea) IPOs, but the examples are many. Wherever there is RenCap - there are inflation of the multiples and dubious analyst assumptions used in valuing the business - at the very least. Please see the history of price quoted prices of said companies to fathom the degree of value destruction RenCap so easily and gladly engineers. After such a track record, RenCap, clearly having "high standards" - most definitely needs good lawyers! But most probably it needs securities litigation lawyers and barristers (specializing in acting on the defense side, of course) - and definitely not the corporate finance and capital market ones... :-)

16-Jul-2012

8:45 pm