IPOs

(noun)

An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time.

Related Terms

Examples of IPOs in the following topics:

  • IPOs

    • The online game developer Zynga's IPO similarly fell flat despite high expectations.
    • If the company was venture-backed, the VC firms often gain their returns from IPO yields.
    • IPOs are not without cost to the company.
    • The Initial Public Offering (IPO) Prospectus for Apple Computer Inc. in December 1980.
    • Apple's valuation after the IPO was over $1 billion. (54 million shares at $22. )

  • Types of Stock Market Transactions

    • Types of stock market transactions include IPO, secondary market offerings, secondary markets, private placement, and stock repurchase.
    • After the IPO, when shares are traded freely in the open market, money passes between public investors.
    • An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of debt, or working capital.
    • Although an IPO offers many advantages, there are also significant disadvantages.
    • Most companies undertaking an IPO do so with the assistance of an investment banking firm acting in the capacity of an underwriter.

  • Window of Opportunity

    • For example, when a firm issues an IPO, which allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of debt, or working capital.
    • However, for a company with massive growth potential, the IPO may be the lowest price that the stock is available for public purchase.
    • Therefore, the IPO presents a window of opportunity to the potential investor to get in on the new equity while it is still affordable and a greater return on investment is attainable.
    • A Twitter banner hanging over the New York Stock Exchange on the day of its IPO.

  • Advantages of Public Financing

    • When a company lists its securities on a public exchange, the money paid by the investing public for the newly issued shares goes directly to the company (primary offering) as well as to any early private investors who opt to sell all or a portion of their holdings (secondary offering) as part of the larger IPO.
    • An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of debt, or working capital.

  • Underwriter

    • In investment banking, underwriters are best known for the role that they play in initial public offerings (IPOs).
    • IPOs are when a company decides to sell equity on the stock market for the first time .
    • Firms may issue an IPO on an exchange such as the New York Stock Exchange (NYSE).

  • Global Research Settlement

    • A typical violation addressed by the settlement was the case of CSFB and Salomon Smith Barney, which were alleged to have engaged in inappropriate spinning of "hot" IPOs and issued fraudulent research reports in violation of various sections within the Securities Exchange Act of 1934.
    • Research analysts will also be prohibited from going on pitches and roadshows with bankers during advertising and promotion of IPOs.
    • Similarly, the Global Settlement also increased the IPO "quiet period" from 25 days to 40 days.

  • Seasoned Equity Offering

    • The best known way of selling equity is through an initial public offering (IPO) where a company sells shares on the market for the first time.
    • A seasoned equity offering (SEO) is a broad term that refers to any sale of shares by the company after the initial IPO.
    • A SEO is the increase of the number of shares outstanding in the market in which the IPO took place, the primary market.

  • Inadequate or incorrect marketing, cooperation, finance, or HR strategies

    • Depending on the financial resources available, e.g. after a successful IPO, it could even make sense to buy out competitors and grow in this fashion.
    • Start-ups can also make another growth mistake in financing by launching their IPOs on the stock market too soon and simply using this revenue to repay debt or venture capital and replace it with equity from the capital market.
    • What is even more serious after an IPO is when firms make the growth mistake of merely increasing their cash management or randomly buying out other firms, rather than using their IPO funds to finance wise growth strategies.

  • Defining Venture Capital

    • Return is earned when the business is sold to another owner or it "goes public" with an initial public offering (IPO).
    • Unfortunately for Facebook's venture capitalist investors (Accel Partners, Greylock Partners and Meritech Capital), the IPO has not performed as well as expected.

  • Venture Capital

    • This happens when the business goes public, issues shares to the general public through an Initial Public Offering (IPO), or is acquired by a third party company.
    • This increases the likelihood of reaching an IPO stage when valuations give high returns.
    • Registration right, defined as the special rights to demand registration of their stock on public exchanges, and to participate in an IPO