Report on Spatial Technology's IPO Failures and Management Impact

This report provides an analysis of the IPO failures of Spatial Technology, examining the reasons behind the lack of investor interest in both the 1992 and 1996 attempts. It explores the influence of the company's management team on the IPO process, highlighting the decisions and strategies that affected the outcome. The report discusses the impact of market conditions and the role of investment banks, as well as the importance of financial valuation and cash flow analysis in the context of IPOs. The report also considers the company's efforts to penetrate the market and the challenges it faced in securing a successful public offering. This detailed analysis aims to provide insights into the complexities of the IPO process and the factors that can lead to its success or failure, offering valuable information for students studying finance and business.

Finance Case Questions

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Stating reasons behind the failure of latest (1996) and previous (1992) in relation to garnering
sufficient interest from investors.................................................................................................3

INTRODUCTION
Financial valuation implies for the process which in turn used for determining the present
value pertaining to expected future cash flow of assets. In this regard, discounted cash flow
(DCF) model is highly significant which assists in estimating investment value referring future
cash flows. It emphasizes on assessing expected future cash flow by taking into account
discounting rate. Further, IPO (initial public offering) implies for the process where shares of the
company are sold to institutional investors. Usually, IPO is underwritten by one or more
investment banks for funding purpose. The present report is based on the case scenario of Spatial
technology Inc which involved in designing and offering modelling software as well as
applications. In this, report will provide deeper insight about the aspects due to which latest and
previous IPO failed to generate interest of investors. Besides this, report will also shed light on
Spatial’s strategy in relation to penetrating the market. Report also depicts influence of Spatial
management team on IPO process.
MAIN BODY
Stating reasons behind the failure of latest (1996) and previous (1992) in relation to garnering
sufficient interest from investors
Impact of Spatial management team on IPO process is enumerated below:
Cited case situation presents that, in 1995, management or board team of Spatial
Technology decided to renew attempts pertaining to IPO. Hence, during this period, IPO plan
introduced by Spatial’s Technology generated effectual interest with regards to investment
banking. Thus, management team of the firm started to identify investment banks which are
available in the market. At that time, investment banking institution showed their enthusiasm
towards company’s technology. Hence, concerned team members took decision in relation to
going publicly by keeping in mind market opportunity available. In the year of 1996, board
members of Spatial Technology accepted offers given by investment banks. However, market
conditions were not stable or uncertain during such concerned period. According to the case
given decision pertaining to launching IPO in August or September considered as risky.
Referring such aspect, management took decision in relation to postpone IPO. Furthermore,

given case clearly exhibits that deal in relation to signing IPO was not highly effectual. Hence, as
per this, no legal binding or contract signed between Spatial and underwriters.