Jan. 30, 2014
David G. Peinsipp
See more on David G. PeinsippCooley LLP | San Francisco | Corporate
He is advising underwriters on more than half a dozen initial public offerings, including Fantex Holdings' IPO of NFL player Vernon Davis of the San Francisco 49ers and the IPO of Arian Foster of the Houston Texans.
Because of the current "quiet period" required by regulators, Peinsipp declined to discuss details of the specific offerings.
"It's a pretty unique idea," he said. "There is nothing quite like this."
While athletes may be different from widgets, the tracking process is relatively similar.
The athlete's brand will record results like any division of a company would, based on the prospects for earnings and endorsements, he said.
Peinsipp added, "The value is dependent on the economic result of some portion of the business."
For instance, if the name recognition of the athlete goes up or he does better on the field, it could impact the value of the brand.
"Anytime you deal with a new security with the SEC, they will be careful about how it's structured and received in the market with investors," he said. "There will be interesting new issues that arise from this."
And challenges, Peinsipp said, "because so much is connected to one person's performance on and off the field."
This will require accurate disclosure, as well as investors knowing what they are getting into, Peinsipp said.
"The company will be careful in putting out stock that is suitable for investors and that has some predictability."
Novel structures also might generate a higher number of smaller, retail investors, as opposed to larger institutions that may take "a wait-and-see approach," he said.
"Retail investments have been on the rise over recent years with high-profile tech stocks, like Facebook and Twitter, as individuals invest more," Peinsipp said, "and the SEC is all for allowing these people to have that ability."
- PAT BRODERICK
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