

Even as Zynga slides, bankers reap big fees - sajid
http://dealbook.nytimes.com/2011/12/19/zyngas-bankers-reap-fees-as-stock-slides/

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jmvoodoo
The bankers work for Zynga in this case, and it seems like they did a good job
for their client by selling a large # of shares at above market.

The fund managers, on the other hand, did a horrible job for their clients
here.

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a3camero
If that's all Zynga paid in underwriting fees they got a good deal.

There's usually a 7% commission for underwriting in the US:
[http://www.theatlantic.com/business/archive/2011/06/is-
under...](http://www.theatlantic.com/business/archive/2011/06/is-underwriting-
a-cartel/240199/). Odd to be criticizing the underwriters for making too much
money when they seem to have cut Zynga a rather good deal.

~~~
_delirium
There's some pushback on whether that standard figure is inflated beyond what
it should be in a competitive market, though, partly because it's been held up
(like real-estate commissions) as this un-negotiable standard fee that just
gets applied. More companies are starting to demand it be negotiated, so it's
not clear anybody really pays 7% anymore.

Related op-ed from a while back about how the US government negotiated rates
more like 0.5-0.75% when it floated AIG and GM, and comparing the US
underwriting rates to those in Asia:
[http://webcache.googleusercontent.com/search?q=cache:jxDEKOD...](http://webcache.googleusercontent.com/search?q=cache:jxDEKODXc88J:finance.yahoo.com/news/Why-
Businesses-Should-Demand-dg-3691424926.html+&cd=1&hl=en&ct=clnk)

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cma
Real estate commissions are negotiable as hell.

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mathattack
The banks have two sets of clients to appeal to. The Investment Bankers have
corporate clients to keep happy. In 2000 companies were happy for the big 2x
IPO day pops. Now they realize this is very expensive PR. On the other hand,
their Institutional Sales has to keep all the Mutual Funds happy. Fidelity
will forgive one misplaced IPO, but not a stream of them. If a bank can't sell
to mutual funds, they won't get new mandates from corporations. Banks have to
walk a thin line to keep both sides happy. (Of course they get paid well when
they do it right)

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hamidpalo
Underwriting fees are irrelevant. Every single firm charges the same,
indicating that they compete on other things. Most of their IPO profit comes
from quid-pro-quos with preferred investors to whom they allocate shares.

Check out some of the links on this page:
<http://bear.warrington.ufl.edu/ritter/ipolink.htm>

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jemfinch
How can a journalist write an entire article about the stock price of company
without stating its stock ticker symbol, ZNGA? It's a little ridiculous that I
had to go to wikipedia to find that out.

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simonw
I'd be surprised if Morgan Stanley think of $10.4 million as anything more
than a rounding error.

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rayiner
$10m here, $10m there, eventually you're talking about real money. ;)

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lanstein
Not really.

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cellis
Do you have any information as to the breakdown of their advisory revenues
vis-a-vis S&T?

~~~
lanstein
Just because they may close a number of $10M deals doesn't mean that
collection isn't still a drop in the bucket in the grand scheme.

Since you're making me look it up (and I thought the point of my comment went
without saying), their full-year revenue last year was $23.4B.

([http://www.morganstanley.com/about/ir/shareholder/4q2009.htm...](http://www.morganstanley.com/about/ir/shareholder/4q2009.html))

