This memorandum is written to assist the decision making about to raise capital for further growth and recapitalize the ownership structure of TRX thorough Initial Public Offering. The analysis is examined from two scenarios. One is that TRX keep on IPO at lower price of $9 per share; another is that it postpones the IPO in 2006. I would project the IPO price of 2005 and 2006, respectively based on the management plan. According to the TRX’s balance sheet and financial data, TRX was a very young technology-integration company which founded in 1999. By 2004, TRX generated $113.4m in total revenues and the ensuing half year it generated about $62m which was already ahead of the last year’s pace. Not only had the top-line revenue growth in industry, the company created the surprised high mean margin growth of EBITDA which was 188.8% from 2002 to 2005 as well. (Figures show in Appendix 1) Although TRX still represented the negative net income right now, the company must have tremendous profit potential to be expected, because TRX will completely remove low-margin business in 2008 in order to generate strong cash-flow and the more of higher-margin business would stems from TRX’s four top clients. Thus, in order to fuel the rapid growth of the business, TRX should be considered as a good candidate for going public. Nevertheless, TRX first failed to go public in 2000 attributed to the overall stock market conditions were awful since the dot-com bubble burst in the late 1990s. From travel industry condition performance, TRX encounter the recession of travel industry, which affected its fortunes since the company closely related with the overall health of the industry. From the overall stock market conditions, the performance of NASDAQ was volatility throughout 2004, even dropped a low in August 2004 and thereby the pricing of IPO was poor when the company prepare to IPO. Even though the rebounded of stock...
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