White-Shoe Firm
A part of cool kid lingo, a white-shoe firm is a way to describe a firm that’s considered prestigious, usually in finance and law, but also sometimes in management consulting. White-shoe firms typically have blue-chip clients, and are old and established.
Why white-shoe? Like white gloves, the term white-shoe comes from back in the day. It’s likely white-shoe came from the 50’s, where graduates from Ivy League schools were wearing fancy-schmancy white Oxford shoes. Quite a departure from what you first probably thought of when thinking “white shoe,” which was a '90s white tennis shoe that gives anyone wearing it away as an American when abroad.
While “white-shoe” generally ascribes to claims of prestige, 2008’s financial crisis changed that a bit. Some white-shoe firms disappeared or got gobbled up by other white-shoe mega-firms. Since they were all exposed to those nasty mortgage-backed securities that were shiny on the outside but rotting on the inside, many white-shoe firms took a hit in reputation. People may not trust white-shoe firms like they did before, leaving room for smaller, newer firms and spunky entrepreneurs to take a shot at impressing their customers.
Related or Semi-related Video
Finance: What is an Underwriter?81 Views
finance a la shmoop what is an underwriter Undertaker underwriter
taking your company public well then you need one of these guys and yeah if [Woman writing at a desk]
things go poorly well then you may need one of these guys but if things go well [Gravestone]
an underwriter will get to know your company audit your financials give their
Good Housekeeping Seal of Approval to the investment community with whom they
deal regularly and introduce you as part of their family selling a piece of your
company to that world you know hedge funds mutual funds private wealthy [List of benefits that come with an underwriter]
investors such that they are the you know financial wind beneath your wings [Skyscraper flying away]
for a brief moment in time the underwriter usually an investment bank
like the vaunted Goldman Sachs or Morgan Stanley or JP Morgan or UBS or Sumitomo
will actually themselves own whatever piece of your company you are bringing [Logos for the banks appearing]
public like if you're selling 18 million shares at 20 bucks the bank's our
underwriters take a new public will own all 18 million shares having paid you
$19.60 for them and then turning around five minutes later and selling them for
20 bucks to John Q invest or making 40 cents a share in spread or markup or in [Spread calculation shown]
this case 40 times 18 million or 7.2 million dollars just for the pleasure so
that's an underwriter and if they screw up well yeah and ironically the [Underwriter stamp]
announcement he'll see in the digital paper is usually in the shape of a
tombstone announcing everything why a tombstone well because it represents the
death of ambiguity or confusion in that company's former life as a private one [Gravestone for ambiguity]
The Undertaker's hopefully have far far away [The Undertaker running away with the word confusion]