I read the prospectus. The fatcats are going to run away with all the money not just in this IPO, but for the company’s future.
Employee compensation will eat up 50% of the revenue automatically, and possibly even more. “Our policy will be to set our total employee compensation and benefits expense at a level not to exceed 50% of our total revenue each year ... however, we may record complensation and benefits expense in excess of this percentage ...” (page 40, (f))
That means operating margin is 50% at best.
Afterwards, an automatic 77% is taken out for a “minority interest ownership of the Senior Managing Directors in Evercore LP” (page 40, (g))
That means gross margin is 13.5% at best. It doesn’t look any more appealing compared to Lazard or Greenhill.
Because of all the revenue eaten away to pay the people in charge of Evercore, the PE will be 23.5, which is more than either Lazard or Greenhill, and I don’t see its growth potential any better.
I’m gonna pass on this one. The only people who are going to get rich are Robert Altman and his buddies. Also look at what happened to Cowan, which is trading below IPO price.
