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A Sneak Peek of What Initial Public Offering or IPO is All About
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Google, the worlds Internet search engine giant, went public in April 30, 2004 in effort to raise $2.7 billion worth of additional investments.
The Madison River Communications Corporations also went public in December 23, 2004.
Telemar Participacoes SA pulled out their initial public offering last August 16, 2006, due to changes in market conditions. It is the biggest cancellation of IPO this year, with over $1 billion worth of IPO withdrawn. In addition, a total of $3 billion worth of IPO have been withdrawn so far in August, making it the worst month for cancellations for 2006.
These are just some of the past and present events that happened within the business community with regards to initial public offering or IPO. For individuals who do not follow the latest events in the business world, IPO is nothing but a simple three-word term. However, for investors who are planning to increase the profitability of their business, IPO is an essential component for them.
What is initial public offering or IPO? In financing, the term applies to the first sale of a corporations common shares to the public. Its major purpose is to raise additional capital for the corporation that will be used on various purposes, especially with regards to business operation. In other words, instead of securing a business loan to finance possible business expansion, many corporations files an IPO before the Securities and Exchange Commission (SEC), which is the governing body for IPO process.
Aside from SEC, there are also underwriters which are composed of several investment banks that will offer the corporations common shares to interested public investors through different methods. They usually assess the value of shares to the market, and paid by commission based on the percentage of the value of the shares sold to the public. In addition, since the IPO process are also governed with heavy legal requirements, corporations under IPO hire the services of major law firms across the country to help them draft a prospectus that will contain the corporations background, finances, and other related information. Such prospectus will be attached to the offer for sale as mandated by the regulations governing the process.
The aforementioned procedure is common on small and not well-known companies. For larger IPO deals (which involves multinational corporations as the issuer or the one selling common shares to the public), it is typically underwritten through a syndicate which is a group of major investment banks that have established themselves in the finance industry. In most cases, the commission that underwriters earned in large IPO deals reaches up to as high as 8 or 9 percent.
All IPO deals in the United States are under the jurisdiction of the Federal Securities Act of 1993 as well as state laws related to the conduct of IPO. If the deal will be done in Europe, the European Union (EU) have unified laws relating to IPO (the Prospectus Directive of 2003) despite the absence of any central regulatory mechanism for the process.
Underwriters in European IPO deals generally have joint and several liabilities for the underwriting of all offered shares for sale. It is relatively different compared to U.S. rules, wherein the underwriters are separately responsible for the allotted portion of the offering.
That is what initial public offering or IPO is all about, regardless of the country the deal will take place.
Companies With Initial Public Offering News
Will Facebook 'friend' IPO market? - InvestmentNews
Will Facebook 'friend' IPO market? InvestmentNews By Andrew Osterland Like other hot technology companies that have gone public before it, Facebook may give the IPO market a much-needed boost. The giant social network, which was founded in a Harvard dorm room in 2004, said Feb. 1 that it will offer $5 ... David Weild: Rebuilding the IPO market |
As Facebook IPO nears, the case for dull stocks - Boston.com
As Facebook IPO nears, the case for dull stocks Boston.com In a filing earlier this month, Facebook said it plans to sell a yet-unknown stake for $5 billion, the largest for an Internet company's initial public offering. The buzz is that the offering could value the whole company at as much as $100 billion ... |
Facebook IPO to Drag Down Secondary-Market Trading, Nyppex Says - BusinessWeek
Facebook IPO to Drag Down Secondary-Market Trading, Nyppex Says BusinessWeek 11 (Bloomberg) -- Facebook Inc.'s initial public offering and the IPOs of other social-media companies will lead to a 24 percent decline in secondary transactions in 2012 as fewer big companies remain private, according to Nyppex LLC. Facebook IPO to Drag Down Secondary-Market Trading This Year, Nyppex Says |
Brasil Travel Cancels IPO as Dozens Companies Wait to Offer - BusinessWeek
Brasil Travel Cancels IPO as Dozens Companies Wait to Offer BusinessWeek 10 (Bloomberg) -- Brasil Travel Turismo e Participacoes SA canceled an initial public offering, citing “unfavorable” market conditions, as the operator of the country's stock exchange says dozens of other companies are waiting for sentiment to improve ... Brasil Travel drops IPO plan as demand wanes Brasil Travel Cancels IPO After Investors Demand Owners Retain More Shares Brazil Travel's IPO Woes Reflect Tricky Market, Mistakes In Offer |
Synacor IPO Opens Up 15% After Cutting Price >SYNC - Wall Street Journal
 Buffalo News | Synacor IPO Opens Up 15% After Cutting Price >SYNC Wall Street Journal By Lynn Cowan Of DOW JONES NEWSWIRES Telecom services provider Synacor Inc. (SYNC) made good early trading gains Friday, its first day as a public company. Its stock opened at $5.75 a share on the Nasdaq, up 15% from its initial public offering price ... Updated: Synacor Rises 5% In IPO, After Shares Price At Low End Synacor prices IPO at low end of range Synacor halves expected IPO price to $5-$6/shr |
Caesars IPO giving investors new out - BusinessWeek
 Bloomberg | Caesars IPO giving investors new out BusinessWeek By OSKAR GARCIA An initial public offering of a tiny slice of Caesars Entertainment Corp. is allowing dozens of investors who bought into what once was the world's largest gambling company to get out -- perhaps with smaller losses than they might have ... Caesars Entertainment soars in IPO Caesars IPO Discount May Come Up Short as Share Sales Loom Caesar's IPO Shows Sharp Trading Swings On Small Float |
Is Caesars a Sucker's Bet? - Barron's
 Bloomberg | Is Caesars a Sucker's Bet? Barron's By ANDREW BARY | MORE ARTICLES BY AUTHOR The company has casinos in Las Vegas and Atlantic City, but none in gambling's hottest market, Macau. Why online poker won't save it. The success of Caesars Entertainment's initial public offering last week ... Caesars Rises as Much as 50% in Debut Caesars IPO gives investors new out Caesars IPO gets lift, Roundy's goes flat |
Facebook artist sick of newfound fortune - Ninemsn
 Daily Mail | Facebook artist sick of newfound fortune Ninemsn By ninemsn staff David Choe, the graffiti artist who became the centre of attention when he made around $190 million when Facebook filed for an initial public offering earlier this month, wishes he could buy his privacy back. The 35-year-old, ... Artist's work now in every Facebook office even though company president Sean ... |