ShmoopTube

00:00

finance a la shmoop. what is a selling syndicate? it's good thing we don't have

00:07

a lisp - well it's just group of salespeople who work together as a team [money with definitions printed on it]

00:10

in a few structured ways. that's about it. but calling it a whispery syndicate .ooh

00:17

that sounds kind of mobish doesn't it? well in a selling syndicate there are a

00:21

series of documents and contractual sales agreements that get negotiated [flow chart]

00:24

among the key players. they're cleverly titled syndicate letters or agreements

00:29

among underwriters -and see that underwriter there that's like the people

00:33

who take a company public and why do you need a syndicate. well you got a sell to

00:36

a whole bunch of buy side people so that the stock floats and a lot of shares

00:40

trade and make it liquid .see that's how that works that's why you need a

00:43

syndicate. and they're basically two types of syndicate :a western-type which

00:47

means more or less every person for themselves which basically means just [definitions displayed]

00:51

sell the IPO shares Mortimer, sell them! a Western account holder essentially buys

00:56

the shares they're given to sell like the syndicate buys them from the issuing

00:59

company and then turns around and sells them to mutual funds and hedge funds and

01:03

you know Bernie from the investment club. if the Western syndicate can't sell

01:07

those shares well they eat them they own them that's it .it's done. an Eastern

01:11

syndicate or Eastern account runs more as a forced partnership. Eastern account

01:15

syndicates require that members sell not only their own allotment but also the

01:20

amount that is not sold by other syndicate members. meaning they have to

01:24

sell the West Coast stuff along with the east coast stuff if that was an issue. got [map of the U.S.]

01:28

it ? it's all about teamwork, and all that stuff. and there you go. you now know a

01:31

thing or two about the wild world of selling syndicates. so yeah forget about

01:34

Biggie and 2pac .this is the real East versus West feud worth beefing over [2 men grimace at each other]

Full Transcript