Do you agree with the decision to list an IPO or should Prada consider other financing options? What are the pros/cons of such options?

Prada decided to move in the direction of an IPO, an initial public offering to raise money. This is an effective form of raising capital because it allows several new investors by selling shares of a company. With an IPO comes several advantages including the appeal of working on a publically traded company that brings the possibility for top talent to have shares in the company. It also allows for greater liquidity and that the company can continue to sell shares as long as there is a demand for them. However, it also brings much more scrutiny as publically traded companies has a slew of different governing bodies and rules that regulate its? business to protect investors including having a mandatory board of directors (Investopedia, n.d.).

Are there any downsides to Prada?s decision to list in Hong Kong?

Prada is historically a very European country, so moving to Hong Kong lessens the European influence on the company?s culture. However, financially it is a wise decision because China has a strong backing of IPOs and it will should be a successful place to launch the IPO.

What types of foreign exchange risk does Prada face?

Prada and all companies that operate internationally face the risk of the exchange rate working against them. If the currency weakens, they can lose a significant amount of capital.

What advice would you give them to hedge against their risks?

As for anything, education and staying close to the source is essential. They need to make sure they are making educated decisions and stay abreast on any potential issues the financial climate is experiencing.

Do you agree with the decision to list an IPO or should Prada consider other financing options? What are the pros/cons of such options?

Prada decided to move in the direction of an IPO, an initial public offering to raise money. This is an effective form of raising capital because it allows several new investors by selling shares of a company. With an IPO comes several advantages including the appeal of working on a publically traded company that brings the possibility for top talent to have shares in the company. It also allows for greater liquidity and that the company can continue to sell shares as long as there is a demand for them. However, it also brings much more scrutiny as publically traded companies has a slew of different governing bodies and rules that regulate its? business to protect investors including having a mandatory board of directors (Investopedia, n.d.).

Are there any downsides to Prada?s decision to list in Hong Kong?

Prada is historically a very European country, so moving to Hong Kong lessens the European influence on the company?s culture. However, financially it is a wise decision because China has a strong backing of IPOs and it will should be a successful place to launch the IPO.

What types of foreign exchange risk does Prada face?

Prada and all companies that operate internationally face the risk of the exchange rate working against them. If the currency weakens, they can lose a significant amount of capital.

What advice would you give them to hedge against their risks?

As for anything, education and staying close to the source is essential. They need to make sure they are making educated decisions and stay abreast on any potential issues the financial climate is experiencing.