Simulation Auction for Public Offering

Abstract

The invention provides a method and system to estimate demand, pricing, allocation and aftermarket demand for public offerings via a simulation auction using collaborative forecasting. The simulation auction incorporates features to enhance participant knowledge about a particular company and its proposed auction. The simulation auction may be used to collect information regarding likely or equilibrium pricing of actual offerings, as well as to generate demand curve provides for different types of participants (e.g. retail and institutional investors).

1 - 20 . (canceled) 
     
     
         21 . A computer implemented system for developing a collaborative price forecast useful to bidders in an identified, real-world investment offering via auction, comprising:
 at least one data processor communicating with a communication network accessible to persons interested in the real-world investment offering;   a code component executing on the at least one data processor configured with auction rules to perform a simulation auction corresponding to the real-world investment offering to determine a simulated clearing price and other market information from the simulation auction and for receiving simulation bids in the simulation auction for a simulated investment corresponding to the identified real-world investment offering;   a code component executing on the at least one data processor for offering to accept simulation bids from simulation participants via the communication network, said offering requiring a simulation bid to state the total amount for which the simulation bid is made;   a code component executing on the at least one data processor for receiving simulation bids via the communication network;   a code component executing on the at least one data processor for applying the set of auction rules to the received simulation bids, to transform the received simulation bids into a simulated clearing price for the simulated investment in the simulation auction that forecasts the clearing price in the identified real-world investment offering; and   a code component executing on the at least one data processor for evaluating simulation bids and selecting for an incentive reward certain simulation bids with greater relative collaborative forecasting utility, one evaluation metric for such utility being proximity of the simulation bid to the simulated clearing price, either above or below such clearing price.   
     
     
         22 . The system of  claim 21  wherein the investment offering is a securities offering. 
     
     
         23 . The system of  claim 21  wherein the investment offering is an offering of shares, and a simulation bid comprises a number of shares and a share price defining a total simulation bid amount. 
     
     
         24 . The system of  claim 21  further comprising a participant filter applied to simulation bids and participant registration information received to filter out potential simulation participants or simulation bids that are detrimental to the simulation auction, said filter applying exclusion criteria selected from the group consisting of: simulation bids or simulation participants that are manipulative, simulation participants viewed as having a conflict of interest, simulation participants trying to game the simulation auction to distort its outcomes, and simulation participants using multiple bids trying to triangulate a clearing price. 
     
     
         25 . The system of  claim 21  further comprising a participant filter applied to simulation bids received to filter non-professional investors from other simulation participants. 
     
     
         26 . The system of  claim 21  further comprising a code component executing on the at least one data processor requiring for simulation bids payment of a participation fee on the order of one-thousandth or less of the total simulation bid amount. 
     
     
         27 . The system of  claim 26  further comprising a participant fee structure applied to simulation bids received that is a fraction of the total simulation bid amount required as a participation fee, said fraction decreasing with an increase in the total simulation bid amount. 
     
     
         28 . The system of  claim 21  wherein the code component for applying a set of auction rules is selected from the group consisting of: a code component that selects from a library of auction methods one method and applies it to the simulation bids received; a code component that selects from a library of auction methods one method that tracks an auction method to be used in a real world investment offering and applies it to the simulation bids received; and a code component that selects from a library of auction methods more than one auction method and applies each method to the simulation bids received to develop and store auction outcomes from simulation bids for each of the more than one auction methods. 
     
     
         29 . The system of  claim 21  further comprising a code component executing on the at least one data processor for providing to simulation participants price forecasting information before sale of the real world investment offering, said information selected from the group consisting of: (a) an individual auction outcome indicating whether a simulation participant's simulation bid was rejected or not and, if rejected, whether it was rejected as below the simulated clearing price determined in the simulation auction, (b) the simulated clearing price, and (c) a combination thereof. 
     
     
         30 . The system of  claim 21  wherein the code component executing on the at least one data processor for evaluating simulation bids evaluates simulation bids also based on the total simulation bid amount. 
     
     
         31 . The system of  claim 21  wherein the code component executing on the at least one data processor for evaluating simulation bids evaluates by use of criteria defined in a table in which each of a plurality of simulation bid amounts has a corresponding required proximity range above or below the simulated clearing price, said range defining the proximity required for a bid in the corresponding bid amount to be selected for an incentive reward. 
     
     
         32 . A computer implemented method for collaborative development before occurrence of a real-world investment offering of price forecasting information for the real-world investment offering, comprising:
 configuring in an auction manager data processing system a simulation auction based on the real world investment offering, including selecting a set of auction rules for determining auction outcomes from simulation bids for a simulated investment corresponding to the real world investment offering;   offering participation in the simulation auction by receiving simulation bids from simulation participants, each simulation bid stating a total simulation bid amount;   receiving via a communication network a plurality of simulation bids submitted by simulation participants;   compiling the received simulation bids prior to occurrence of the real world investment offering;   before occurrence of the real world investment offering, applying in a computer processor the selected set of auction rules to the compiled simulation bids, to compute a simulated clearing price for the simulated investment in the simulation auction;   providing to simulation participants price forecasting information before occurrence of the real world investment offering; and   evaluating simulation bids and selecting for an incentive reward certain simulation bids with greater relative collaborative forecasting utility, one evaluation metric for such utility being proximity of the simulation bid to the simulated clearing price, either above or below such clearing price.   
     
     
         33 . The computer implemented method of  claim 32  wherein the investment offering is a securities offering. 
     
     
         34 . The computer implemented method of  claim 33  wherein the securities offering is an offering of shares, and a simulation bid comprises a number of shares and a share price defining a total simulation bid amount. 
     
     
         35 . The computer implemented method of  claim 32  further comprising applying a participant filter to simulation bids and participant registration information received to filter out potential simulation participants or simulation bids that are detrimental to the simulation auction, said filter applying exclusion criteria selected from the group consisting of: simulation bids or simulation participants that are manipulative, simulation participants viewed as having a conflict of interest, simulation participants trying to game the simulation auction to distort its outcomes, and simulation participants using multiple bids trying to triangulate a clearing price. 
     
     
         36 . The computer implemented method of  claim 32  further comprising applying a participant filter to simulation bids received to filter non-professional investors from other simulation participants. 
     
     
         37 . The computer implemented method of  claim 32  further comprising requiring for simulation bids a participation fee that is a fraction on the order of one thousandth or less of the total simulation bid amount. 
     
     
         38 . The computer implemented method of  claim 37  further comprising applying a participation fee structure to simulation bids received that decreases the fraction of the total simulation bid amount required as a participation fee with an increase in the total simulation bid amount. 
     
     
         39 . The computer implemented method of  claim 32  wherein the step of applying a set of auction rules comprises a step selected from the group consisting of: (a) selecting from a library of auction methods one method and applying it to the simulation bids received; (b) selecting from a library of auction methods one method that tracks an auction method to be used in the real world investment offering and applying it to the simulation bids received; and (c) selecting from a library of auction methods more than one auction method and applying each method to the simulation bids received to develop and store auction outcomes from simulation bids for each of the more than one auction methods. 
     
     
         40 . The computer implemented method of  claim 32  wherein the step of evaluating simulation bids and selecting for an incentive reward certain simulation bids with greater relative collaborative forecasting utility comprises executing a rewards module that evaluates simulation bids and selects certain simulation bids with greater proximity to the simulated clearing price or greater total simulation bid amount as having earned a reward comprising analyzed bid information developed from received simulation bids or credits usable for participation fees. 
     
     
         41 . The computer implemented method of  claim 32  wherein the step of evaluating simulation bids and selecting for an incentive reward certain simulation bids with greater relative collaborative forecasting utility comprises executing a rewards module that evaluates simulation bids based in part on proximity to the simulated clearing price and also based on the total simulation bid amount and selects certain simulation bids with greater proximity to the simulated clearing price or greater total simulation bid amount as having earned a reward comprising collaborative price forecasting information developed as a premium content report derived from received simulation bids and not supplied to all simulation participants, or credits usable for participation fees. 
     
     
         42 . The computer implemented method of  claim 32  wherein the premium content report derived from the simulation auction comprises at least one of a demand curve for simulation participants that are professional investors, a demand curve for simulation participants that are non-professional investors, a demand curve for all simulation participants, and a distribution of bid sizes and share prices in a share offering. 
     
     
         43 . The computer implemented method of  claim 32  further comprising executing a rewards module that evaluates simulation bids based in part on proximity to the simulated clearing price and also based on the total simulation bid amount as defined in a table in which a bid amount has a corresponding required proximity range above or below the simulated clearing price. 
     
     
         44 . The computer implemented method of  claim 32  further comprising executing a rewards module that evaluates simulation bids to reward those with greater proximity to the simulated clearing price and with greater total simulation bid amount, and selects for rewards certain simulation bids based on weighting of these factors that is adjustable in software. 
     
     
         45 . The computer implemented method of  claim 34  further comprising comparing a simulation participant's simulation bid per share price to a clearing price of a security in the real world securities offering and providing a purchase prompt after occurrence of the real world offering to at least one simulation participant who provided a simulation bid that exceeds the clearing price in the real world securities offering. 
     
     
         46 . A computer readable storage medium containing a computer program for executing a method according to  claim 32 .