MacroMarkets Case Shiller UMM & DMM IPO Update

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MacroMarkets to use market maker on UMM and DMM

Kinda what I heard last week in talking to MacroMarkets but the official press release is out. Bottom line, the initial ipo failed because there was an unequal demand for the up and down shares and by definition, these linked trusts have to be created in pairs of equal shares of each UMM and DMM. A few quotes from the news release:

"We tried to do something innovative and we tried to do it at a time when the IPO market was just about dead," Shiller told Reuters.

Originally, MacroMarkets set a minimum closing investment pool of $125 million. It extended the auction in an attempt to meet that goal, citing intense interest from institutional investors who needed more time to understand the security and get approval for it internally.

But in the end retail investors showed themselves more willing to take a risk on a new product than institutions, whose gauntlet of committees and procedures make them slower to seize unconventional opportunities, Shiller said.

Now the plan is to launch the IPO in the open market with a market maker seeding the issue with $20 million. No definitive timeline of when it would start trading. So I guess we are back to the holding pattern...
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