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- 🏦 Investment Banking
Here are a few things you should know before reading:
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All of the tools and information we provide are backed up by research and statistics.
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Ah no, runners.
😏
May today’s newsletter wipe out your resentment.
INTRO:
Investment Banking is a field of finance that focuses on providing guidance on financial services, mergers and acquisitions, and securities underwriting.
Picture Batman here, the knight of Gotham City, as the embodiment of investment banking, stealthily working behind the scenes to protect the financial well-being of companies and communities.
Batman?
Yes, bear with us on this one.
Unless you hate him, of course.
. . .
Back to our main character:
So, Batman acts as the guardian of companies seeking to raise funds for their ventures. He evaluates the value of their stocks and bonds, ensuring they are appealing to investors.
Much like Batman's alliance with Commissioner Gordon, investment bankers work closely with their clients to develop strategies for success. They create intricate financial models and structures to optimize their clients' financial outcomes.
What does an investment banker do?
Well, the entry-level job is that of an analyst who researches companies, analyzes financial statements, and creates models.
As a finance or business graduate, IB is arguably your best option aside from accounting and consulting.
Many people also enter IB with the goal of shifting to another career further on, such as venture capital, and that is guaranteed to give them an edge.
MERGERS AND ACQUISITIONS
Mergers: Just like Batman and Robin team up to fight crime, two companies come together to conquer the market, expand their reach, and become a force to be reckoned with.
Acquisitions: In acquisitions, the bigger company absorbs the smaller one, gaining its unique strengths and intellectual property. Market domination is not too ahead now ;).
Similar to Batman's utility belt, investment bankers have a toolkit of financial instruments to make these deals happen. They might use fancy terms like stock swaps, cash transactions, or leveraged buyouts, but all you need to know is that they employ creative strategies to ensure the deal benefits both parties involved.
SECURITIES UNDERWRITING
Securities underwriting is like Batman's plan to raise money for the company by selling its stocks to the public. He assesses the company's value, designs a strategy, and ensures the stocks are priced right.
When everything is ready, Batman, acting as the underwriter, swoops in and takes the risk of buying the stocks from the company.
He then sells them to eager investors during the thrilling event called the Initial Public Offering (IPO), where the company makes its grand debut on the stock market.
Bada bing bada boom
💥
RESOURCES
Wallstreet prep? Probably:
Corporate finance tools and blogs by Damodaran, MBA, PhD.
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The Rundown Team.
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