Friday, November 17, 2006

Regarding the NYMEX Holdings IPO

Watching CNBC and the NYSE specialists post with all the floor brokers gathered to make their commissions when trading opens up on this stock makes the case for all electronic trading. How can you have a fair and orderly market with orders lined up all the way down the hall at the NYSE?

Another thing that no one ever talks about is the problems that stem from the deliberate overpricing of new shares which creates a huge wealth transfer from a newly public company to the major customers of an investment bank. Shareholders are much better off in the long run with a higher net worth than with an artificial and temporarily high stock price. Remember that IPO’s are allocated to clients who pay big commissions, Steinhardt and Cramer come to mind. Those responsible for completion of an IPO are the lead underwriters. If the brokers were held liable for the tremendous carnage inflicted on early buyers of IPO’s the mispricings would end. Those responsible for a company are the directors. If directors were held liable for the eradication of corporate assets by allowing for an IPO to go out at say half the opening price, the mispricings would end. Why should a firm leave so much on the table for Wall Street to pocket?

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Native American Advisors CHIPPEWA PARTNERS

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CHIPPEWA PARTNERS, Native American Advisors, Inc. is a Registered Investment Advisor, founded by Dean Thomas Parisian in 1995. The firm is a manager to an exclusive clientele and is closed to new clients. As a Registered Investment Advisor, our expertise developed over 35 years balances experience, integrity and tremendous work ethic. Dean Parisian is a member at the White Earth Reservation of the Minnesota Chippewa Tribe, a former NYSE and FINRA arbitrator and trader who began his career with Kidder Peabody and later worked for Drexel Burnham Lambert in LaJolla, CA. His philanthropic interest is in Native American education and he's endowed a significant scholarship for Native Americans at the University of Minnesota. His greatest accomplishment includes raising two sons and 26 years of marriage. The Parisian family enjoys outdoor pursuits at Pamelot, their farm in Tennessee and at the Ghost Ranch, their ranch on the Yellowstone River in Montana. For media requests contact the firm via email: ChippewaPartners (at) gmail dot com, on Twitter: @DeanParisian. Global 404-202-8173