Method and system for optimal pricing and allocation for a set of contractual rights to be offered with canceling/modifying of indications of interest

• US 8,447,684 B2
• Filed: 12/20/2010
• Issued: 05/21/2013
• Est. Priority Date: 03/05/2004
• Status: Active Grant

• Current Assignee: Barry Forman
• Original Assignee: Avery N. Caleb
• Inventors: Avery, N. Caleb
• Primary Examiner(s): EBERSMAN, BRUCE I
• Application Number:
  US12/973,758
• Publication Number:
  US 20110191230A1
• Time in Patent Office: 883 Days
• Field of Search: 705 35- 39
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/00 Commerce
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method and system for the determination of optimal pricing and allocation of securities in an open, competitive environment. The method and system may also be used in developing pre-markets of other items that are difficult to price and allocate in a competitive manner, such as the underwriting/securitization of contracts for property; future revenue/earning streams from an asset and/or group of assets; underwritten insurance portfolios, intellectual property and other goods and services. The system of price optimization and allocation is accomplished by interactive feedback of information using a display and including competitive participation of individual members of the public (and/or their agents) or institutional buyers over a data network e.g., the Internet, uncovering the nature and identification of demand in a self-organizing fashion. Demand emerges through participants'"'"' interaction with the system and with each other, via a graphically-supported, interactive reservation process.

Claims

1. A computer-implemented method for generating an order book of reservations for potential contractual rights purchasers in a set of contractual rights to be offered by an issuer, comprising the steps of:

(a) storing, on one or more computer-readable media that are operatively coupled to one or more processors, a database comprising information relating to a plurality of units of a contractual rights offering of one or more types at one or more prices that are available for reservation, wherein each of the units of the contractual rights offering is intended to be offered as a contractual rights for later sale to the potential contractual rights purchasers;

(b) transmitting, from the one or more processors which are operatively connected to one or more communication devices, a first set of one or more signals to at least a first plurality of the potential contractual rights purchasers that identify the status of the plurality of units of the contractual rights offering, wherein the status comprises an identification of units of the contractual rights offering at each type and each price that are available;

(c) receiving, at the one or more processors, a second set of one or more signals that indicate a request by a first potential contractual rights purchaser to reserve a first group of one or more of said units of the contractual rights offering;

(d) determining, at the one or more processors, using the second set of one or more signals, a first reservation comprising units within the first group that are available for reservation;

(e) updating the database on the one or more computer-readable media to reflect the first reservation;

(f) transmitting, from the one or more processors, a third set of one or more signals to at least a second plurality of potential contractual rights purchasers that identify at least the following;

(i) units within the plurality of units of the contractual rights offering that are available for request for reservation, and

(ii) the first reservation as being reserved;

(g) receiving, at the one or more processors, a fourth set of one or more signals that indicate a request by a second potential contractual rights purchaser to reserve a second group of one or more units of the contractual rights offering;

(h) determining, at the one or more processors, using the fourth set of one or more signals, a second reservation comprising units within the second group that are available for reservation;

(i) updating the database on the one or more computer-readable media to reflect the second reservation;

(j) transmitting, from the one or more processors, a fifth set of one or more signals to at least a third plurality of potential contractual rights purchasers that identify at least the following;

(i) units within the plurality of units of the contractual rights offering that are available for request for reservation,

(ii) the first reservation as being reserved, and

(iii) the second reservation as being reserved;

(k) receiving, at the one or more processors, a sixth set one or more signals that indicate a request by a third potential contractual rights purchaser to reserve a third group of one or more units of the contractual rights offering;

(I) determining, at the one or more processors, using the sixth set of one or more signals, a third reservation comprising units within the third group that are available for reservation;

(m) modifying at least one of the first reservation and the second reservation to remove at least some of the units in the modified reservation;

(n) updating the database on the one or more computer-readable media to reflect the third reservation and the modification of at least one of the first reservation and the second reservation;

(o) transmitting, from the one or more processors, a seventh set of one or more signals to at least a fourth plurality of potential contractual rights purchasers that identify at least the following;

(i) units within the plurality of units of the contractual rights offering that are available for request for reservation,

(ii) the status of the first reservation,

(iii) the status of the second reservation, and

(iv) the third reservation as being reserved;

p) terminating, upon the occurrence of a condition, the transmission of signals that identify the plurality of contractual rights units that are intended to be offered for later sale; and

(q) generating the order book that comprises reservations that are stored on said database;

wherein in step (m) the first or second reservation is modified and the method further comprises the step of transmitting, from the one or more processors, an eighth set one or more signals that indicate at least to the first or second potential contractual rights purchaser information relating respectively to the modified first or second reservation.

2. The method of claim 1, wherein the price is an interest yield or yield equivalent.

3. The method of claim 2, wherein the yield comprises one or more of the following:

a yield rate, an interest rate, a coupon rate, a yield equivalent, a yield-to-maturity rate, a yield-to-call rate, a yield-to-worst-call rate, and a spread from an index.

4. The method of claim 1, further comprising the step of setting a threshold price for requests for reservations.

5. The method of claim 1, wherein the number of units of a contractual rights offering available at a particular price is limited to less units than the total number of units of the contractual rights offering.

6. The method of claim 1, wherein in step (m) the modified first reservation comprises at least one unit as being reserved.

7. The method of claim 1, wherein in step (m) the modified first reservation includes no units as being reserved.

8. The method of claim 1, wherein in step (m) the modified second reservation comprises at least one unit as being reserved.

9. The method of claim 1, wherein in step (m) the modified second reservation comprises no units as being reserved.

10. The method of claim 1, wherein the number of the plurality of units of the contractual rights offering of one or more types at one or more prices that are available for reservation request are increased.

11. The method of claim 10, further comprising the step of transmitting, an additional set of one or more signals to at least a fifth plurality of potential contractual rights purchasers that identify new units available for reservation that have been added to the plurality of units of the contractual rights offering.

12. The method of claim 1, wherein prior to the first reservation, there is a plurality of reservations.

13. The method of claim 1, wherein between the first reservation and the second reservation, there is a plurality of reservations.

14. The method of claim 1, wherein between the second reservation and the third reservation, there is a plurality of reservations.

15. The method of claim 1, wherein between the third reservation and the occurrence of the condition, there is a plurality of reservations.

16. The method of claim 1, wherein the contractual rights comprise revenue streams from one or more contracts.

17. The method of claim 1, wherein the contractual rights are for goods.

18. The method of claim 17, wherein the goods are commodities.

19. The method of claim 1, wherein the contract rights are for services.

20. The method of claim 1, wherein the contractual rights are used to hedge risk.

21. The method of claim 20, wherein the method used to hedge risk is insurance.

22. The method of claim 1, wherein the contractual rights are to real property.

23. The method of claim 1, wherein the contractual rights are to used property.

24. The method of claim 1, wherein the contractual rights are to intellectual property.

25. The method of claim 1, wherein the one or more types comprise contractual rights of a series.

26. The method of claim 1, wherein the one or more types comprise contractual rights having the same maturity.

27. The method of claim 1, wherein the one or more types comprise contractual rights having the same price.

28. The method of claim 1, wherein the one or more types comprise contractual rights available for reservation by a predetermined investor class.

29. The method of claim 28, wherein the predetermined investor class comprises one or more institutional investors.

30. The method of claim 28, wherein the predetermined investor class comprises one or more retail investors.

31. The method of claim 28, wherein the contractual rights for the predetermined investor class have a predetermined price.

32. The method of claim 28, wherein the number of units of contractual rights for the predetermined investor class is fixed.

33. The method of claim 28, wherein the contractual rights for the predetermined investor class have one or more prices calculated based on the prices of other reservations outside the predetermined investor class.

34. The method of claim 1, wherein the first set of one or more signals, the third set of one or more signals, the fifth set of one or more signals, and the seventh set of one or more signals further comprise display information to direct the display of a computer system receiving said signals to display the status of the plurality of units of the contractual rights offering.

35. The method of claim 34, wherein the display information further comprises information to direct the display to display a historical representation of the quantity of units in reservations made as a function of time.

36. The method of claim 34, wherein the display information further comprises information to direct the display to display for each reservation price along a first axis and quantity along a second axis.

37. The method of claim 36, wherein the display information further comprises information to direct the display to display along a third axis an additional aspect of each reservation.

38. The method of claim 34, wherein the display information further comprises information to direct the display to display a plurality of axes, and the information displayed in at least one axis changes.

39. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of a normalization comprising said first and second reservations.

40. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of previous offerings of similar units.

41. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of reservations exceeding a predetermined size.

42. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of the type of entity associated with each reservation.

43. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation that is one or more of the following:

static;

iterative; and

a simulation.

44. The method of claim 34, wherein the display information sent to the display of the first potential contractual rights purchaser is generated based on information relating to the first potential contractual rights purchaser.

45. The method of claim 34, wherein the display information sent to the display of the second potential contractual right purchaser is generated based on information relating to the second potential contractual rights purchaser.

46. The method of claim 34, wherein the display information sent to the display of the third potential contractual right purchaser is generated based on information relating to the third potential contractual rights purchaser.

47. The method of claim 34, wherein the display information further comprises information to direct the display to display additional information with one or more of said first, second, third, and modified reservations.

48. The method of claim 34, wherein the display information further comprises information to direct the display to display a calculator.

49. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of there being accepted reservations that exceed the number of available units.

50. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of a spread in the prices associated with each reservation.

51. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of changes in prices of the reservations over time.

52. The method of claim 34, wherein the display information further comprises information to direct the display to display an identification of the potential purchaser of at least one the first, second, third, and modified reservations.

53. The method of claim 34, wherein the display information further comprises information to direct the display to display a representation of a projected set of reservations.

54. The method of claim 34, wherein the representation includes a representation of the outcomes of game theory-based scenarios.

55. The method of claim 1, wherein the method is carried out as a simulation.

56. The method of claim 34, wherein the display information further comprises information to direct the display to display multiple displays for units having different characteristics.

57. The method of claim 34, wherein the display information further comprises information to direct the display to display split screens for units having different characteristics.

58. The method of claim 34, wherein the display information further comprises information to direct the display to display a tabbed screen for units having different characteristics.

59. The method of claim 1, further comprising the step of transmitting an additional set of one or more signals, at any point in time, which directs a display of a computer system receiving the additional signal to display information stored in the database.

60. The method of claim 59, wherein the computer system to which the additional set of one or more signals is transmitted to one or more computers of one or more of the following:

the issuer, and one or more agents of the issuer.

61. The method of claim 1, further comprising the step of setting the price for each unit in the order book at the price of its corresponding reservation.

62. The method of claim 1, wherein all units of the contractual rights offering are set at a single price.

63. The method of claim 1, wherein the single price for at least some of the units is different than the price of at least one of the reservations.

64. The method of claim 1, further comprising the step of pricing units at different prices to different potential contractual rights purchasers.

65. The method of claim 1, further comprising the step of setting one or more prices of the units as a function of aspects of all the reservations in the order book.

66. The method of claim 65, wherein the function is based on an average of the prices of the reservations in the order book.

67. The method of claim 65, wherein the function is based on adjusting the average of the prices to set terms of the contractual rights prices.

68. The method of claim 67, wherein the average is a weighted average.

69. The method of claim 1, further comprising the step of rewarding potential debt purchasers whose requests for reservation are early in time.

70. The method of claim 69, wherein the reward comprises a favorable price.

71. The method of claim 69, wherein the reward comprises an additional allocation of the units.

72. The method of claim 69, wherein the reward comprises post-sale price support.

73. The method of claim 1, further comprising the step of not accepting a request for reservation that fails to meet a predetermined condition.

74. The method of claim 1, wherein a commission on the later sale of the units is a function of the value of the units of the order book.