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Initial Public Offering Legal Requirements—Undergoing IPO is not as Easy as you Think
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Growth of their business is one thing that most investors want to happen during their tenure in the business industry. They want to see the operation of their business to grow and probably expand it to accommodate the needs of other potential clientele not just within the regional coverage but on the national or probably on the international coverage as well. Such growth in business operation alone already translates to huge revenues later on.
However, along with the sweet fruits of the growth of your operation, expect that you will incur additional expenditures resulting from such operation growth. You need to finance additional personnel who will handle the expanded operation as well as additional raw materials from your suppliers. In other words, once the growth is seen within the business operation, there is a need for you to sustain such growth by assuring that all additional expenditures will be met along the way.
Thus, you need additional funding to sustain your growing company. Additional capital must be raised to finance the expansion of business operation.
What will you do? Ask your financial advisers or even market experts, and they will just spell three significant words to you.
INITIAL PUBLIC OFFERING.
Also known as IPO, initial public offering is referred to as the first sale or issuance of a company’s common shares to the interested investors. Its main purpose is to raise additional capital or finances for the company through the distribution of their common shares to investors who want to purchase it. Take note that the term only applies to the first sale or issuance of a company’s common shares to the public. Any later issuance of shares will now be referred to as a secondary market offering.
IPO is considered to be an effective method of raising capital for a company. However, take note that the laws of a particular country where the IPO process will take place impose heavy legal requirements and compliances that every company going on public must met. In other words, undergoing an IPO process is not as easy as you think. You must be knowledgeable about the rules and regulations that you must comply with regarding IPO.
In the United States, the initial public offering is governed by the Federal Securities Act of 1993, together with the rules and regulation of the U.S. Securities and Exchange Commission. In addition, each exchange has their respective and separate rules that any company that will go on public must comply. For small companies that will undergo the IPO process, it may be affected by a certain state’s blue sky laws, though such laws may pre-empted by federal laws especially when the common shares are listed on major exchanges.
Before the IPO process jumps off, the issuer (the company that will sell its common shares to the public) must outline a prospectus. It will contain the overview of the company’s history, corporate background, products, operations, risk factors, and other essential information. The Securities and Exchange Commission will actively review the content of the prospectus and major law firms are involved in the drafting process.
Once the SEC approved the prospectus, the market value of the common shares will now be finalized and the IPO are now in the “free riding” stage wherein the shares will now be offered for sale on different methods, such as road shows, telephone calls, and institutional visits. All the offers must be accompanied by a copy of the prospectus.
The legal requirements are really heavy if your company will go on IPO. However, once such legal requirements have been complied with, expect that additional capital that you will use to sustain the growth of your business’ operation is within your reach.
Initial Public Offering Ipo+ News
HomeStreet Shares Climb Following Initial Public Offering - Wall Street Journal
HomeStreet Shares Climb Following Initial Public Offering Wall Street Journal By Lynn Cowan Of DOW JONES NEWSWIRES The third try was a charm for lender HomeStreet Inc. (HMST), which posted trading gains on its initial public offering Friday after two previous attempts to come public failed. HomeStreet, which postponed its ... HomeStreet, Inc. Announces Pricing Of Its Initial Public Offering Of Common Stock HomeStreet Prices IPO At Midpoint Of Range HomeStreet completes IPO, raising nearly $80M |
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 |
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 Announces Pricing of Initial Public Offering Synacor halves expected IPO price to $5-$6/shr |
Facebook IPO: Public Trading Expected Spring 2012 - OzarksFirst.com
 Campus Times | Facebook IPO: Public Trading Expected Spring 2012 OzarksFirst.com ( Springfield , MO ) -- Facebook is going public. The Internet social network filed to raise $5 billion in its initial stock sale. It's expected to be the largest initial public offering -- or IPO -- ever. Experts say the high profile is similar to ... Facebook IPO inspires students Facebook IPO will not affect users Stocks Rising on Facebook's IPO Euphoria |
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 ... Brazil Travel's IPO Woes Reflect Tricky Market, Mistakes In Offer Brasil Travel drops IPO plan as demand wanes Brasil Travel failure extends IPO drought |
Facebook To Raise $5 Billion From Initial Public Offering - Voice of America
 Los Angeles Times | Facebook To Raise $5 Billion From Initial Public Offering Voice of America February 01, 2012 Facebook To Raise $5 Billion From Initial Public Offering Mil Arcega Facebook is going public. The world's largest social media network filed documents late Wednesday for its much anticipated initial public offering (IPO). Facebook files for initial public stock offering Facebook seeks to raise $5 bn in initial public offering Facebook files for initial public offering, looks to raise $5 billion |
Is Facebook really worth $100bn? - ArabianBusiness.com
 BusinessWeek | Is Facebook really worth $100bn? ArabianBusiness.com The social network, founded by CEO Mark Zuckerberg in his Harvard dorm room seven years ago, has been valued at $75-100bn while its initial public offering (IPO) is one of the most hyped flotations in years. But even those figures fail to impress some. A $100 Billion Value for Facebook? That May Be Possible The Ultimate Guide to Facebook's IPO Facebook shapes as most intriguing float |
Elon Musk Anticipates Third IPO in Three Years With SpaceX - BusinessWeek
 RedOrbit | Elon Musk Anticipates Third IPO in Three Years With SpaceX BusinessWeek 10 (Bloomberg) -- Elon Musk, chief executive officer of Space Exploration Technologies Corp., wants the private rocket-launch business to have an initial public offering in 2013, the entrepreneur's third such sale in about three years. SpaceX Could Go Public In 2013 |