UPS going private again.....

[djbeckett]

Do you think UPS will go private again? If so, how long do you think it will take them to go back to being private?
It sure would be nice to get the returns they UPS employees used to get on thier investments in the company back before they went public!

[HazMatMan]

Originally Posted by djbeckett

Do you think UPS will go private again? If so, how long do you think it will take them to go back to being private?
It sure would be nice to get the returns they UPS employees used to get on thier investments in the company back before they went public!

Don't know if they can do that. If going private, you mean take UPS off of the New York Stock Exchange, then what about all the people who bought UPS stock from Wall Street??

[Just Lurking]

Originally Posted by HazMatMan

Don't know if they can do that. If going private, you mean take UPS off of the New York Stock Exchange, then what about all the people who bought UPS stock from Wall Street??

Why not? Its the latest trend since Sarbanes-Oxley passed. There has been several in the past couple weeks (Texas Utilities @ ~$40B)
With ~$80B market cap for UPS and roughly half in private hands (Class B) that would equate to ~$40B plus 25% premium being ~$50B needed to due the buyout. Possible but no likely.

[trickpony1]

Originally Posted by HazMatMan

Don't know if they can do that. If going private, you mean take UPS off of the New York Stock Exchange, then what about all the people who bought UPS stock from Wall Street??

....they will become millionaires like some management people already are.

[Dfigtree]

Originally Posted by Just Lurking

Why not? Its the latest trend since Sarbanes-Oxley passed. There has been several in the past couple weeks (Texas Utilities @ ~$40B)
With ~$80B market cap for UPS and roughly half in private hands (Class B) that would equate to ~$40B plus 25% premium being ~$50B needed to due the buyout. Possible but no likely.

" Why not? Its the latest trend since Sarbanes-Oxley passed."
Just Lurking, can you explain the SOX connection to this thread?


Sarbanes-Oxley Provisions

The Sarbanes-Oxley Act's major provisions include the following:

• Creation of the Public Company Accounting Oversight Board (PCAOB)
• A requirement that public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting, and that independent auditors for such companies "attest" (i.e., agree, or qualify) to such disclosure
• Certification of financial reports by chief executive officers and chief financial officers
• Auditor independence, including outright bans on certain types of work for audit clients and pre-certification by the company's Audit Committee of all other non-audit work
• A requirement that companies listed on stock exchanges have fully independent audit committees that oversee the relationship between the company and its auditor
• Ban on most personal loans to any executive officer or director
• Accelerated reporting of insider trading
• Prohibition on insider trades during pension fund blackout periods
• Additional disclosure
• Enhanced criminal and civil penalties for violations of securities law
• Significantly longer maximum jail sentences and larger fines for corporate executives who knowingly and willfully misstate financial statements, although maximum sentences are largely irrelevant because judges generally follow the Federal Sentencing Guidelines in setting actual sentences
• Employee protections allowing those corporate fraud whistleblowers who file complaints with OSHA within 90 days to win reinstatement, back pay and benefits, compensatory damages, abatement orders, and reasonable attorney fees and costs.

[Just Lurking]

Originally Posted by Dfigtree

" Why not? Its the latest trend since Sarbanes-Oxley passed."
Just Lurking, can you explain the SOX connection to this thread?


Sarbanes-Oxley Provisions

The Sarbanes-Oxley Act's major provisions include the following:

• Creation of the Public Company Accounting Oversight Board (PCAOB)
• A requirement that public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting, and that independent auditors for such companies "attest" (i.e., agree, or qualify) to such disclosure
• Certification of financial reports by chief executive officers and chief financial officers
• Auditor independence, including outright bans on certain types of work for audit clients and pre-certification by the company's Audit Committee of all other non-audit work
• A requirement that companies listed on stock exchanges have fully independent audit committees that oversee the relationship between the company and its auditor
• Ban on most personal loans to any executive officer or director
• Accelerated reporting of insider trading
• Prohibition on insider trades during pension fund blackout periods
• Additional disclosure
• Enhanced criminal and civil penalties for violations of securities law
• Significantly longer maximum jail sentences and larger fines for corporate executives who knowingly and willfully misstate financial statements, although maximum sentences are largely irrelevant because judges generally follow the Federal Sentencing Guidelines in setting actual sentences
• Employee protections allowing those corporate fraud whistleblowers who file complaints with OSHA within 90 days to win reinstatement, back pay and benefits, compensatory damages, abatement orders, and reasonable attorney fees and costs.

It has more to do with the implementation of SOX. Public companies would rather error to stay on the proper side of SOX plus cost that it imposes on them. If a company is managed fiscally and legally then SOX is just costing public companies a great deal of money.

Only public companies are covered by SOX. Private comapnies are not. I believe that if SOX was in place in 1999 that UPS would stayed private.

I was not implying in any way that UPS was "pumping numbers"

[steelheader69]

I heard rumor that UPS was trying to buy up as much of that stock that's floating around as possible. Do believe you can go private again, just need to get your stock back. But, that was just a rumor I've heard (but one I could easily believe). Didn't UPS sell off shares so they could buy up a company that dealt with electronics???? Remember hearing something about that, but not 100% sure.

[breadbooze]

Originally Posted by HazMatMan

Don't know if they can do that. If going private, you mean take UPS off of the New York Stock Exchange, then what about all the people who bought UPS stock from Wall Street??

UPS buys their shares back.. I think it was mentioned somewhere UPS would be buying back $6B in outstanding shares.

[djbeckett]

Let me rephrase my question. Do you think UPS will eventually buy back enough shares to go private in the next 10 years?

UPS went public once before in 1929 and in 1933 it went back to being
private.
In 1999, UPS went public again.
http://money.cnn.com/magazines/fsb/fsb_archive/2003/04/01/341024/inde...
"...But James Casey's most enduring legacy, even more so than his
business achievements, is the work culture at UPS. "The basic
principle which I believe has contributed more than any other to the
building of our business as it is today," he said in 1955, "is the
ownership of our company by the people employed in it." Casey's belief
in being privately held was in part a reflection of his own closely
guarded persona. "We have kept confidential facts and figures pretty
close to ourselves," he once said, "as most prudent people would do
with their own private affairs." But that attitude was definitely
shaped by what was perhaps the biggest threat UPS ever faced: Its
abortive attempt to go public in 1929. There's little information on
it, and Casey never liked discussing the move. "The arrangement did
not work out entirely as contemplated" was about as expansive as he
got, and UPS managers were able to recover all the stock by 1933.
After that he routinely dismissed publicly traded companies as being
owned by "absentee stockholders" and run by "hired men."

Casey believed in employee ownership because he felt it led to a more
committed workforce. "You treat the business like it's yours because
it is," says Jim Kelly, a 37-year UPS vet who retired as CEO in 2002.
Once a driver or package handler was promoted to supervisor, he or she
became a partner and was permitted to own company stock, which could
be sold back to UPS upon retirement.

In the late 1990s company executives had to address how to balance
this entrenched attitude with the company's need for the currency of
publicly traded stock to make acquisitions. "We agonized about whether
we could go public and maintain our corporate culture," said Kelly,
who led an IPO in 1999. "If we couldn't reconcile the two, we wouldn't
have done it." UPS offered just 10% of its stock to the public. ....."


From what I have read it seems that UPS does not plan on staying public indefinitely. I think they have an exit plan back to being a private employee owned company.

What is your take on the topic?

[Hangingon]

I suppose they might go private again if the major stockholders (upper mgm't and BOD) could figure out how to make even more of a profit off their shares then they were able to make when we went public. Since I never saw any large acquisitions that were made using UPS stock that we could not have made with cash we had available preIPO, it seems from my point of view the only reason we went public was to increase the value of the stock that was already owned.

I may be mistaken (and probably am) but it seems like the only large scale use of cash UPS has every year is to buy back more stock from stockholders and continue to prop up the value of the stock.

[peacock71]

The only reason I would ever see UPS going private again is if the stock dropped down to al level where we could afford to buy it all back without taking on $30-$40B in debt. Highly unlikely and not to be desired. As for Sarbanne-Oxley, UPS is in pretty good shape there, even though the provisions caused a lot of work to be done.

The big reason for going public was to establish our stock as currency, which also hearkens back to Jim Casey acquisition days. I just wonder why we havn't made an acquisition for stock yet.

The buy back reduces shares outstanding, putting upward pressure on the price of the stock, but it also says we don't have anything better to do with the money.

Go UPS!
P71

[HazMatMan]

I know this is off topic, but how do you start a thread?? No I don't think UPS will go private again, see I threw that in there to be not so off the topic..lol

[moreluck]

if you go to UPS Discussions......on the top of page, left side about a couple inches down it says, "Threads in Forum".....just above that is a rectangular box with a small blue arrow saying "start a new thread". That's how to do it.

You have to give the new thread a title too.

[HazMatMan]

Originally Posted by moreluck

if you go to UPS Discussions......on the top of page, left side about a couple inches down it says, "Threads in Forum".....just above that is a rectangular box with a small blue arrow saying "start a new thread". That's how to do it.

You have to give the new thread a title too.

Thank you.

[FinancialPlanner]

" The big reason for going public was to establish our stock as currency." So, what's the little reason?
Before you can reasonably guess as to whether UPS will go private, you must know why UPS went public. I have never seen a UPS endorsed statement as to why UPS went public. Those who know, aren't talking. And, those who are talking, don't know. Why keep it secret?

[mittam]

When I worked financial services I saw a few companies that went from private to public and back to private. If done correctly and timely it can lead to a windfall profit for the company. Yes it does happen, not all that much but yes UPS probably has their comp geeks watching the stock and waiting for the appropriate time.

[dave_socal]

UPS going private ? I don't know one way or the other, I do know that I'll continue to buy UPS stock . The payroll deduction purchase plan works great and if it wasn't for that OPL crap they sold us I'd have even more shares. I love the dividen check I just recieved, extra cash 4 times a year you can't beat that. I belive stock price is very cheap right now and if UPS continues its buy back policy it should go up. I'll sell when I retire or maybe not, by that time my dividen check will be huge!

[Channahon]

Originally Posted by FinancialPlanner

" The big reason for going public was to establish our stock as currency." So, what's the little reason?
Before you can reasonably guess as to whether UPS will go private, you must know why UPS went public. I have never seen a UPS endorsed statement as to why UPS went public. Those who know, aren't talking. And, those who are talking, don't know. Why keep it secret?

UPS soars past record IPO November 10, 1999: 4:30 p.m. ET

Stock opens at 30 percent premium to IPO that raised record $5.5B
By Staff Writer Chris Isidore NEW YORK (CNNfn) - United Parcel Service burst out the gate rapidly Wednesday, as the scramble for the stock by investors large and small sent it up 30 percent at the opening of trade. The stock closed its first day with a 35 percent gain.
The Atlanta parcel-delivery giant priced the IPO at $50 a share late Tuesday, above the recently raised $47 to $49 range set only Friday. The first trade, at 10:03 a.m. on the New York Stock Exchange, was 65. The stock continued to climb, reaching a high of 70-5/16 at 11:35 a.m. before sliding to 67-1/4 at the 4 p.m. close.
That is still up 17-1/4 or 35 percent from the IPO price and 164 percent from the price of the stock Tuesday when it was privately traded.
The company combines a strong balance sheet, among the best profit margins in the trucking industry and a lion's share of the growing business of delivery goods purchased by consumers online, making it an attractive Internet play as well.
"I think there's an excitement that surrounds the whole Internet component, even though it's still not the bulk of what they do," said Ben Holmes, founder of ipoPros.com, an online research firm. "But it also becomes an institutional darling almost immediately." Institutional investors oversubscribed the offering 10 times over, and with individual investor demand that climbed to 14 to 15 times oversubscription, according to a person familiar with the offering. Some 80 million shares traded Thursday, almost three-quarters of the volume of shares issued Wednesday.
Lots of profits, but high price
The company posted net income of $1.95 billion in the 12 months ending Sept. 30, before a $1.4 billion charge for possible payment in a tax dispute. That gives it a ratio of price to trailing earnings of 28 at the IPO price, but a ratio of almost 38 at the closing price. It had revenue of $26.3 billion for the 12-month period, far exceeding any other transportation company.
That compares to a P/E ratio of 20 for its key competitor, FDX Corp. (FDX), owner of Federal Express and rival ground parcel carrier RPS. FDX's stock was at 43-1/4, down 3/4, at the 4 p.m. close.
UPS had more than $2.6 billion in cash or equivalents on hand at the end of the last quarter and the best debt rating of any corporation, so it did not need the money from the IPO. Its officials said it wanted to be able make acquisitions using stock rather than cash and create a market for shares held by employees and retirees.
The company said has generally grown through expansion of operations, rather than acquisitions, but it has used purchases to fill in holes in its global network, such as the purchase earlier this year of Challenge Air, a Miami air cargo carrier with authority that UPS lacked to fly to many South American countries.
At the time of the IPO plans were announced, James Kelly, UPS' chairman and chief executive, mentioned the growing threat from acquisition-hungry European postal authorities that have privatized recently.
"It really hasn't been about the money. It's been about positioning our company for the future and giving us the currency for acquisitions," Kelly said in an interview on CNNfn Wednesday after the close of trading.
Company comments make some people think that UPS would focus on other overseas purchases with its stock. Others suggested that technology companies might be on its plate.
"The valuations for technology companies are very high. Why would you pay cash for that, why not pay with another inflated stock?" said Ullas Naik, senior vice president, research and an IPO expert at FAC Equities.

[BrownBlackandBlue]

Originally Posted by Channahon

UPS soars past record IPO November 10, 1999: 4:30 p.m. ET

Stock opens at 30 percent premium to IPO that raised record $5.5B
By Staff Writer Chris Isidore NEW YORK (CNNfn) - United Parcel Service burst out the gate rapidly Wednesday, as the scramble for the stock by investors large and small sent it up 30 percent at the opening of trade. The stock closed its first day with a 35 percent gain.
The Atlanta parcel-delivery giant priced the IPO at $50 a share late Tuesday, above the recently raised $47 to $49 range set only Friday. The first trade, at 10:03 a.m. on the New York Stock Exchange, was 65. The stock continued to climb, reaching a high of 70-5/16 at 11:35 a.m. before sliding to 67-1/4 at the 4 p.m. close.
That is still up 17-1/4 or 35 percent from the IPO price and 164 percent from the price of the stock Tuesday when it was privately traded.
The company combines a strong balance sheet, among the best profit margins in the trucking industry and a lion's share of the growing business of delivery goods purchased by consumers online, making it an attractive Internet play as well.
"I think there's an excitement that surrounds the whole Internet component, even though it's still not the bulk of what they do," said Ben Holmes, founder of ipoPros.com, an online research firm. "But it also becomes an institutional darling almost immediately." Institutional investors oversubscribed the offering 10 times over, and with individual investor demand that climbed to 14 to 15 times oversubscription, according to a person familiar with the offering. Some 80 million shares traded Thursday, almost three-quarters of the volume of shares issued Wednesday.
Lots of profits, but high price
The company posted net income of $1.95 billion in the 12 months ending Sept. 30, before a $1.4 billion charge for possible payment in a tax dispute. That gives it a ratio of price to trailing earnings of 28 at the IPO price, but a ratio of almost 38 at the closing price. It had revenue of $26.3 billion for the 12-month period, far exceeding any other transportation company.
That compares to a P/E ratio of 20 for its key competitor, FDX Corp. (FDX), owner of Federal Express and rival ground parcel carrier RPS. FDX's stock was at 43-1/4, down 3/4, at the 4 p.m. close.
UPS had more than $2.6 billion in cash or equivalents on hand at the end of the last quarter and the best debt rating of any corporation, so it did not need the money from the IPO. Its officials said it wanted to be able make acquisitions using stock rather than cash and create a market for shares held by employees and retirees.
The company said has generally grown through expansion of operations, rather than acquisitions, but it has used purchases to fill in holes in its global network, such as the purchase earlier this year of Challenge Air, a Miami air cargo carrier with authority that UPS lacked to fly to many South American countries.
At the time of the IPO plans were announced, James Kelly, UPS' chairman and chief executive, mentioned the growing threat from acquisition-hungry European postal authorities that have privatized recently.
"It really hasn't been about the money. It's been about positioning our company for the future and giving us the currency for acquisitions," Kelly said in an interview on CNNfn Wednesday after the close of trading.
Company comments make some people think that UPS would focus on other overseas purchases with its stock. Others suggested that technology companies might be on its plate.
"The valuations for technology companies are very high. Why would you pay cash for that, why not pay with another inflated stock?" said Ullas Naik, senior vice president, research and an IPO expert at FAC Equities.

Cha,
That is far too simple, be advised that we the members would be more open to grand conspiracy theories in the future. Thank you. BBB

[SeniorGeek]

Originally Posted by FinancialPlanner

" The big reason for going public was to establish our stock as currency." So, what's the little reason?
Before you can reasonably guess as to whether UPS will go private, you must know why UPS went public. I have never seen a UPS endorsed statement as to why UPS went public. Those who know, aren't talking. And, those who are talking, don't know. Why keep it secret?

Because it would be bad PR to admit that the IPO was mainly a way to quickly enrich the major stockholders. If the Board that set the stock price had one day declared a value of $70, regulatory agencies would have been probing every opening. The IPO allowed the tail to wag the dog, and you can't prosecute the free market.

Back to the question about going private again: not likely. The IPO was 109 million "B" shares that could be market traded. I think this left 90% as "A" shares which can be held only by employees and retirees. Over time, shares have been moving to publicly-traded. At the end of 2005, only 42% class "A" shares remained. To buy back 58% of the 1.08 billion shares at $70/share would require about $43 billion.

I did not know that UPS had been publicly traded from 1929 to 1933 until I read it here. (It's on the Internet, so it must be true.) There was probably a need to finance the new air shipping service. This raises questions:

• Can 1999's publicly-traded stock issue rightfully be called an "Initial Public Offering"?
• How did so many shares make the transition from "A" to "B"...and why?
• Was the board thinking that 1999's stock market would be like 1929's, and they'd be able to buy back the stock at a bargain?

[FinancialPlanner]

Thank you, Channahon. I appreciate the information. And, I really liked the following Kelly-ism.

"It really hasn't been about the money. It's been about positioning our company for the future and giving us the currency for acquisitions,"

So ... It's not about the money. It's about the currency. I have a thousand dollars in my savings account. That's money! And, it's in US dollars. That's currency!

The strange thing about Kelly's statement is that UPS already was a currency before UPS went public. Didn't most of us own a few shares of UPS stock before Nov. 1999?

And, there seems to be some kind of equivalence here ,too, in that UPS could acquire a company for two pre-public offering shares (say, at $25) or 1 post-public offering share (say, initially set at $50). Same thing, except that the acquired company's shareholders have a say in UPS doings. So, 1) "A" shareholders (UPSers, UPS foundations and retirees) have 10 time the voting power of B shares (outsiders), 2) pre-IPO shareholders get a doubling of the value of their shares, 3) the value of the company remains the same and 4) UPS has a huge meaningless market capitalization.

Money vs. currency.

[moreluck]

"The strange thing about Kelly's statement is that UPS already was a currency before UPS went public. Didn't most of us own a few shares of UPS stock before Nov. 1999?"

Financial....the weirdness of the stock as a privately held one was that not many banks would loan $$ with UPS stock as collateral. If it wasn't on Wall Street they wouldn't even talk to you. You weren't allowed to sell it.....I repeat, you WEREN'T allowed to sell it if you were management.....bosses pressured you if you were even considering it. So, the stock, pre-IPO, wasn't much of a 'currency'.

Turns out to be a good thing that we hung on to it and because of the IPO enabled us to leave early.

[upsdawg]

UPS reverting back to a privitely held company??? Why------------well it would make great sense if at the same time the Teamsters Pension plans were frozen and everything went to a 401k company match---especially right before contract time.

It would get a huge buy in from management and hourly alike---get rid of the Teamster control of the pension plans---bail UPS out from having to pay into the multi-employer plans for non-UPSers pensions!!

Overnite had a 7% 401k employer match in lieu of a pension------at least one would have control of their future monies( I'm assuming that you would have some options as to how to invest---SP500---Midcaps--2035 Horizon Funds?)

[brownmonster]

7% of $1500 a week is only $105. UPS puts $215 towards our pension now. I want the $215 in my 401K.

[djbeckett]

If UPS poured money in to our 401Ks instead of the Teamster Pension Plan that could work out for the people that know how to hold on to their money, like you and me. However, on the other hand the people that do not know how to save and take loans against their 401Ks (& ending up defaulting on the loan) would end up near retirement money to support them.

But if UPS decided that they were going to make the money they put in the 401K off limits to loans some how, that could work for all of us, especially if we got a few more mutual funds to pick from in the Teamster 401K.
If UPS decided to match 14.33% of an employee's salary and put it into their 401K; that would come out to about $215/wk on a salary of $1500/wk. This would work, if the employee could not touch it until they retired!

This would not go over well at all with the Teamsters though, even if the money was going into the Teamsters UPS 401K Plan. This would kill the rest of the underfunded Teamster Pension Fund! This probably will never happen. I have friend that works for the state of Michigan and the state matches 8% of his salary and puts it into the 401K no matter if he puts any money in to the 401K or not.

Either way, we at UPS have it pretty good when you consider what the employees that work for the Detroit auto companies are going through! Thank God we still have jobs and are not taking major pay cuts!