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Initial Public Offering Made Netscape an Internet Browser Giant
from:
IPO.
Single acronym, yet with different meanings and applications.
It may stand for intellectual property ownership. It may also stand for the Instituto Portugues de Oncologia or the Portuguese Oncology Institute which is situated at the University of Porto in Portugal. It may probably refer to the Israel Philharmonic Orchestra which is one of the leading symphonic orchestra in Israel and one of the best-performing orchestra around the world.
However, when you are talking about the IPO in the world of finance, it only spells three distinctive words.
Initial public offering.
Initial public offering or referred to by its acronym IPO, is basically the first sale of a company’s common stocks to the public, which is why it is called “company that will go on public”. One of the major reasons why companies go on public is to raise additional capital that will be used to sustain their operational expenses. Although companies undergoing the IPO process must adhere to the heavy legal requirements imposed by the governing laws and authorities, IPO is considered to be an effective method in raising additional capital for a company.
Typically, an IPO process involves several investment banks that will act as the underwriters for the deal. The company will enter an agreement with a lead underwriter that will facilitate the public issuance of their common shares to the public. The issuer (or the company issuing the common shares) must draft a prospectus that will show the details of the company’s background, history, products, operations, industry environment, and other related factors.
Such prospectus will be submitted to the U.S. Securities and Exchange Commission (SEC) for approval. Once approved, the price of the common shares will be finalized, and the IPO will now be on the “free riding period” wherein the shares will be offered to the public in different ways.
In most cases, newly-formed and not well-known companies are the ones involved in the IPO process. However, there are large corporate organizations that go on public to further raise funds to sustain their growing business operation. One of which is the Netscape.
Netscape, or formerly known as the Netscape Communications Corporation, is an American-founded computer application company, which is best known for their Internet-browsing products and services. The Netscape browser was dominant before in terms of usage share. However, with the competition among different browsers, Netscape have lost their user base within that particular area. As a result, the usage share of Netscape browsers is now under 1 percent and still falling slowly.
Netscape went public for the first time in April 1994. They have filed before the Securities and Exchange Commission for an initial public offering of 3.5 million shares of common stocks to the public. After the completion of the IPO process, Netscape were able to grow faster than any other existing software company in terms of revenues. Their initial market value was now around $ 1 billion against the $200 or $300 million of other computer application companies. In addition, they have enough cash to pay for their additional expenditures.
Netscape existed as an independent company from 1994 up to 2003 before they became the subsidiary of the America On Line (AOL). However, the Netscape brand is still in use.
Although the Netscape is now a subsidiary of another large Internet-based company, it showed that through IPO, additional capital to pay for additional expenses and increased market value is a possibility.
Initial Public Offering Stocks News
A look at how some IPO stocks have fared
Facebook has filed paperwork for an initial public offering of stock. Its public debut will be the most anticipated tech IPO since Google went public in August 2004.Below is a look at how the stocks of ...
Read more...Facebook Files Initial Public Offering Papers
Facebook is about to find out how many friends it has. The social networking giant wants to sell shares to the public. It filed papers for an initial public offering Wednesday. With about 800 million users, Facebook is one of the most visible companies in the world. But until now, the financial side of Facebook has remained largely a mystery. For more, Melissa Block talks to NPR's Steve Henn.
Read more...MCX to launch $125 mln IPO Feb 21 - sources
MUMBAI (Reuters) - Multi Commodity Exchange (MCX), India's biggest commodity exchange by turnover, plans to launch an initial public offering of shares on February 21 to raise up to $125 million, two sources ...
Read more...Number of Tech and Communications IPOs: 34
There's growing buzz about a new bubble in dot-com stocks, and Facebook threw a little gasoline on the fire last week. The company's filing for an initial public offering generated enthusiasm from investors eager to get a piece of the world's largest social-networking company.
Read more...How 9 Tech Giants Traded After Going Public [INFOGRAPHIC]
Now that Facebook has filed paperwork for its Initial Public Offering, the world will be watching the company's value. Assuming the SEC approves the filing, stocks will likely begin trading in May.
Read more...Brasil Travel Cancels IPO After Investors Demand Owners Retain More Shares
Brasil Travel Turismo e Participacoes SA canceled an initial public offering after investors demanded current shareholders hold on to a bigger stake in the company.
Read more...They're not Facebook, but social media stocks run up anyway
The hype over Facebook's initial public offering has excited investors revisiting other social media companies, even though most of those stocks have plunged since the fanfare of their own IPOs. Trading ...
Read more...Asia Stocks to Watch: Facebook boosts Chinese Internet stocks
The hype over Facebook’s initial public offering helps put the shine back on China’s social-media stocks, after a slide sparked by concerns over Chinese accounting and corporate governance issues.
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