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Finance: What is a Selling Syndicate? 6 Views
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What is a selling syndicate? A selling syndicate is kind of a middleman. It’s made up of underwriters who buy securities from a company, if the securities are stock, or any issuer, depending on the security. Then they sell these securities to small firms so they can turn around and sell them to clients.
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Transcript
- 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]
Full Transcript
- 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]
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