Offering Closed:
Prospectus (dated 05/02/05) - Click Here
(4.5 mb file - 15 minute download at 56k)
| Symbol |
MORN |
| Total Shares Offered |
7,612,500 |
| Price |
$18.50 |
| Exchange |
NASDAQ |
| Lead Manager |
WR Hambrecht + Co |
Auction TimeLine
Lombard Securities is not an underwriter or a selling agent, but a distribution agent.
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What Is OpenIPO? |
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Traditionally, new issues of stock in the United States have had their offering prices set by negotiation between the issuer (the company going public) and the managing underwriter (the head broker in a syndicate of brokers formed specifically to distribute the new issue). The offering price is officially known as the Public Offering Price (P.O.P.), and all buyers must pay that P.O.P. for the new issue. |
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The OpenIPO process, first used in 1999, represents a significant departure from traditional IPO pricing. First of all, it is the investors, not the managing underwriter who sets the Public Offering Price of new issues in the OpenIPO process. This means that the price that you bid on the offering--not your relationship with your brokerage firm--will determine whether you are successful in obtaining shares in a specific public offering. |
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Let’s say that a new company wants to go public by issuing a million shares of common stock through the OpenIPO process. Once the offering information is available through OpenIPO, you can download a prospectus describing the company and its business over our website. After reading the prospectus you may want to bid on the issue. If that’s the case, simply order an OpenIPO package from us, open an account with Lombard Securities, decide what price per share you would like to bid and how many shares you want, then send us a check that will cover your total bid. You will then receive instructions from us about how to submit your bid over the Internet. Of course, you can change or withdraw your bid as you see fit at any time before the offering date. Once your bid is submitted for final consideration, you must wait for the Public Offering Price to be established. If your bid is lower than the offering price (say $9 per share versus the $10 offering price), you get your money back (usually with interest). If your bid exceeds the established offering price (let’s say you bid $11 and the offering price is $10) or
is precisely at the offering price (you bid $10 and the offering is at $10), you may be allocated part of your requested number of shares, but not necessarily all of them. All purchasers pay the Public Offering Price regardless of the amount of their bids. This means that if your bid, in this case, was $11, you would still pay only $10 for the issue since the Public Offering Price was pegged at $10. |
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You may wonder then, “How is the offering price determined?” Let’s suppose, as in the example above, that the company decides to issue one million shares in the new offering. The price is determined by auction. On the day before the pricing, all bids are shut off. Then the OpenIPO auction process begins. First the total number of bids are electronically sorted from the highest bid to the lowest bid. (In this case, let’s assume that bids are received for a total of 1.5 million shares). Then, since the company wants to sell only 1 million shares, the bids are accepted in descending order of share price until 1 million shares are allocated. All bids are accepted at the same price per share. That price is determined by the lowest bid of all accepted bids. For all investors whose bids are equal to or exceed the offering price, shares would be allocated in proportion to the number of shares for which they expressed interest. |
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Finally, the issuing company--not the investor--pays the brokerage commission on OpenIPO new issues. Moreover, in contrast with many conventional new issues, there are no underwriter restrictions on after-market trading imposed on buyers of OpenIPO issues. |
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If you are a potential investor, click here to request an OpenIPO Package or call us at 1.800.755.2144. |
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