Classic Risk Management: IPO on Football Player

While it is not often publicly vocalized, one motivation to take a company public through an IPO is to cash in during strong IPO “market environments” while transferring risk on an unknown future.  Such might be the case with the recent announcement that an IPO is being planned on San Francisco 49ers' star tight end Vernon Davis, bestowing on the athlete turned risk manager $4 million from the sale of securities while providing investors 10% of his future earnings.

"Upside call on post career earnings"

Running the math through his head, Buck French, CEO and founder brokerage firm Fantex Inc (OTCMKTS:ANFRL) that is...