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1998 Initial Public Offering Article
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Initial Public Stock Offering Process in 1965-Looking Back on the Past
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Seventy percent of the human body is composed of water. Thus, every human being needs water for life support. There are many incidents wherein individuals survived for several weeks by just drinking water.
Trees and plants need sunlight to complete their photosynthesis or their food-making process. In addition, it is also an essential element for their growth. Without sunlight, their chance of survival is very slim even when they are supported with water and necessary soil nutrients.
In the same manner, companies need capital or financial assets to support their day-to-day business operation. They need to pay the suppliers of the raw materials that they are using to manufacture their products. They need to pay their employees who helps the company manages its operation. Advertising and other PR stuffs also needs financial support in order to promote their products to the public.
Thus, capital for all companies serves as their "bloodlines". Without it, no business operation, and definitely, no generated revenue for the company.
Companies can raise additional capitals that they need to support their business operation as well as possible expansions in various ways. However, one of the more popular ways to raise capital for a company is the IPO or the initial public offering. It is referred to as the first sale of a company's common shares to interested public investors. As previously mentioned, it is primarily used to raise additional capital for the company. Keep in mind that this term only refers to the first public issuance of a company's common stocks. Any later issuance of common shares to interested public investors is now referred to as a secondary market offering.
Initial public offering of common stocks has proven to be an effective way of raising additional capital for a company, though there are legal compliances and reporting requirements that must be met. The United States is considered to be imposing heavy legal requirements to those companies that will file an IPO for additional capital generation. Under the Federal Law, all IPO process are governed by the Securities Act of 1993 and laws of the U.S. Securities and Exchange Commission, with each stock exchange has its separate respective rules that every company must follow.
The IPO process generally includes one or more investment banks (financial entities that assist both public and private companies or corporations in raising capital as well as provide strategic advisory services for acquisitions, mergers, and other kinds of financial transactions) as the underwriters. The company will enter a contract with the underwriter to facilitate the issuance of the stocks to the public. The underwriters will be the one to approach investors who are interested in buying those common stocks.
During the early years of the IPO, it is considered to produce a positive mean initial return to the listing companies. In 1965 when the IPO process is still on its first years of operation, there are around 120 companies listed which generates an average initial return of 11.4 percent from the issuance date to the end of the offering month.
IPO analysts recorded an average of 22 percent worth of initial returns on the listed companies from 1965 to 2004. It clearly shows that many investors are interested on purchasing shares through the IPO process. It also illustrates that companies under IPO listing generally provides an additional capital for them.
The initial public offering of common stock during the 1965 era is just a manifestation that the IPO process, despite of the heavy legal requirements that must be made, it is still the most ideal way to issue stocks to the public and raise additional capital for a company's day-to-day business operation.
1998 Initial Public Offering News
Facebook Role May Win Morgan Stanley IPO Lead for Third Year - BusinessWeek
 Mobiledia | Facebook Role May Win Morgan Stanley IPO Lead for Third Year BusinessWeek For more on Facebook's IPO filing, see {EXT5 }.) Feb. 2 (Bloomberg) -- Morgan Stanley may cement its status as the top underwriter for US initial public offerings for a third year running with its lead role on Facebook Inc.'s planned $5 billion sale. Why Facebook's IPO shouldn't excite you The Score: Facebook Soars on IPO, But Air Gets Thin How Facebook Really Stacks Up Against Pre-IPO Google |
Greenway Medical Technologies Announces Exercise of Underwriters' Option to ... - MarketWatch (press release)
Greenway Medical Technologies Announces Exercise of Underwriters' Option to ... MarketWatch (press release) The option was granted in connection with Greenway's initial public offering of 6666667 shares. As a result, the total initial public offering size is 7666667 shares, which consists of 6388833 shares sold by Greenway and 1277834 shares sold by the ... |
Waste-to-Biofuels Firm Enerkem Files for $125 Million IPO - Smart Energy News
 Smart Energy News | Waste-to-Biofuels Firm Enerkem Files for $125 Million IPO Smart Energy News Montreal – Enerkem, a waste-to-biofuels and chemicals company, has filed with the Securities and Exchange Commission for its initial public offering of stock to raise an estimated $125 million. Founded in 1998, Enerkem develops fuels and chemicals made ... |
AAJ Response to Carlyle Dropping Forced Arbitration Clause in IPO - MarketWatch (press release)
AAJ Response to Carlyle Dropping Forced Arbitration Clause in IPO MarketWatch (press release) WASHINGTON, February 3, 2012 /PRNewswire via COMTEX/ -- The Carlyle Group today announced that they are withdrawing the forced arbitration clause that was included in its proposed IPO filing to the US Securities and Exchange Commission, in response to ... |
Business news: Facebook to make IPO, Gupta case twist, Ford underwhelms analysts - The Star-Ledger - NJ.com
 The Star-Ledger - NJ.com | Business news: Facebook to make IPO, Gupta case twist, Ford underwhelms analysts The Star-Ledger - NJ.com Facebook, the largest social-networking site, may file for its initial public offering on Feb. 1 and is close to hiring Morgan Stanley to handle the deal, the Wall Street Journal reported, citing unidentified people. The company is considering a ... |
Facebook: The largest IPO in history? - MSN Money
 MSN Money | Facebook: The largest IPO in history? MSN Money By InvestorPlace on Wed, Feb 1, 2012 12:35 PM By Jeff Reeves Ready for the largest IPO in history? Well, you'll have to keep waiting because Facebook won't be it. Facebook filed documents for its initial public offering of stock as early as Wednesday. Why the Facebook IPO is Overhyped Facebook has filed for an initial public offering that could value the social ... Facebook readies IPO with Morgan Stanley as "lead left" investment bank |
First senior exit at Glencore since IPO - Financial Times
First senior exit at Glencore since IPO Financial Times By Javier Blas, Commodities Editor Glencore, the world's largest commodities trading house, is to lose Steven Blumgart, one of its most senior executives, in the first significant departure since its multibillion-pound initial public offering last year ... |
Greenway Medical Technologies Announces Exercise of Underwriters' Option to ... - PR Newswire (press release)
Greenway Medical Technologies Announces Exercise of Underwriters' Option to ... PR Newswire (press release) The option was granted in connection with Greenway's initial public offering of 6666667 shares. As a result, the total initial public offering size is 7666667 shares, which consists of 6388833 shares sold by Greenway and 1277834 shares sold by the ... |