Thomas weisel Case
1403 words 6 pagesThomas Weisel Case
1.As a Montgomery Securities partner in mid 1997, would you argue for or against selling the firm to NationsBank? Why? Montgomery experienced great prosperity in the1990’s, its revenue leaping more than sevenfold, from $94 million in 1990 to $705 million in 1997. Most of its success came from investing in fast-growing companies. On June 30, 1997, NationsBank Corporation of Charlotte, N.C. announced that it was acquiring Montgomery for approximately $1.3 billion, believing that the combination would create one of the nations top full-service investment banks. The acquisition price was about 15 times the firm’s earnings and 13 times its book value. Before the sale of the firm to NationsBank, Weisel said, “We …show more content…
Unfortunately, after the financial crisis in 2008 the company, as with other financial companies, TWP had significant losses due to bad investment in sub-prime mortgage securities.
A highly diversified portfolio in markets such as Internet, education and demographic and healthcare, TWP initial investment approach had a guaranteed steady return for its investors.
During the financial crisis the situation turned even sourer for TWP, to the point that the SEC accused the company of misallocating $16 million in shaky securities
Later in 2010, Stifle Financial, a brokerage firm based in St. Louis, had reached a merger agreement with Thomas Weisel Partners worth about $300 million.
The two companies formed a “middle-market investment bank” that beefed up their combined research and wealth management capacity. The companies’ combined revenue was estimated at $1.6 billion.
Another advice for him, after the financial crisis debacle, would be to better protect the investments of his clients through safer investments and diversification, and avoid deviating from its original mission to invest in sectors of high growth. Growth and competitive strategy projects help companies find the best path to profitable growth.
The most attractive growth markets are not necessarily the largest or fastest growing, but rather the markets where you have the strongest competitive position and differentiators. Within target segments we can drill