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Initial Public Offering of Shares—Is it the Best Option for your Corporate Organization?
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Going public or not?
That is one question that pops out of the minds of different corporate directors and executives of growing companies. The consistent growth of their operation translates to revenues. In order to maintain the flow of revenues, different corporate directors and executives must sustain the growth of the company by infusing additional investment.
Securing a corporate loan is a good idea, but undergoing an initial public offering is probably the best idea that corporate directors and executives can arrive into. Why get the company into debt when the company’s assets such as common shares could be used to raise additional capital that will sustain the company’s continuous growth?
IPO or initial public offering is the first or initial sale of a company’s common shares to the public, which is why it is also referred to “going public”. The most convincing reason why many companies are going public is because it is the most convenient and probably the safest way to raise capital that will be used to sustain operational expenditures.
However, there are still some “strings attached” to this process. Though it’s other reasons such as easy access to much needed capital, increased employee compensation and liquidity due to additional funding, prestige, and publicity are compelling, there are still pointers that you must consider when deciding if initial public offering is the right option of for you to take.
Remember what happened to Netscape when it went public in April 1994? They became the prestigious computer application company that rose above its competitor, with its actual market value reaching $1 billion. However, the executives lost control of the company and even the company itself, which resulted to the selling of the company’s interest to America On Line (AOL). Many investors think that they can capitalize from the revenues generated through IPO, and yet what happened is that the company itself suffered.
Before getting into an IPO process, make sure that your company is “sexy enough” for investors. In other words, your marketing ideas (the industry and the products or services that you offer to the public) are extremely popular to the consumer, which makes it very appealing to the investors. That is why IPO is not ideal for starting and not-well known companies because the risk of losing any infused investment due to unpopularity of its marketing ideas is present. Better assess your marketing ideas first before jumping into IPO.
Do you really understand why you are going into public? You must look the revenues that will be generated on IPO as an “emergency fund” and not as a “luxurious fund”. If the company’s present financial bucket could still sustain the growth of the company and the presence of an explosive growth needs to be seen, there is no reason to go in public. It will just create little benefits to the executives as well as to the future shareholders.
Do you have the necessary funds that you will spend when going public? Keep in mind that there are corresponding expenditures in each stage along the process. For instance, you must have a well-established business plan in order to answer the disclosure document questions, which is an essential part in convincing investors with regards to the viability of your IPO. Creating a well-established business plan alone will cost you as much as $20,000.
Is the initial public offering the best option that you can choose? It requires careful assessment and evaluation of various factors. Do not be attracted by fame and publicity—it can easily kill you.
Ipo Initial Public Offering News
Can Facebook pursue a social mission and go public at the same time? - Christian Science Monitor
 Christian Science Monitor | Can Facebook pursue a social mission and go public at the same time? Christian Science Monitor While Facebook prepares for a public stock offering Zuckerberg has also told the public and potential investors that his company has a 'social mission' too. Facebook's IPO listing [Initial Public Offering, or first sale of stock to the public] has ... Facebook to go public An Insider Shares Mark Zuckerberg's 6 Secrets for Success Facebook's Mark Zuckerberg has too much control, major investor says |
Caesars Fetches $1.13 Billion Market Value After Pricing IPO - BusinessWeek
 Bloomberg | Caesars Fetches $1.13 Billion Market Value After Pricing IPO BusinessWeek 7 (Bloomberg) -- Caesars Entertainment Corp., the casino chain saddled with more than $22 billion in debt, completed an initial public offering that gives the company a market value of $1.13 billion. Las Vegas-based Caesars, taken private in a $30.7 ... Caesars prices shares at $9; IPO set for Wed. Caesars Prices IPO at $9 a Share Caesars IPO Discount May Come Up Short as More Sales Loom |
A Look at How Some IPO Stocks Have Fared - ABC News
 Jutia Group | A Look at How Some IPO Stocks Have Fared ABC News 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 some recently public companies are faring. Why IPOs Are a Lousy Bet Facebook and the IPO ETFs Facebook valuation will be high, but justified, expert says |
HomeStreet renews a downsized IPO effort - The Seattle Times
 Housing Wire | HomeStreet renews a downsized IPO effort The Seattle Times HomeStreet Bank's parent company slashed the size of its proposed initial public offering to $64.7 million in a filing on Tuesday, a fraction of the $210 million IPO it first pitched to Wall Street last May. By Sanjay Bhatt No comments have been posted ... HomeStreet cuts IPO size HomeStreet Cuts IPO Size To 1.25 Mln, Raises Price To $43-$45 HomeStreet (HMST) Amends IPO Filing, Now Sees IPO Price of $43-$45/Share |
JMP's Mack Says Facebook's IPO to Be `Huge Bellwether' - Washington Post
JMP's Mack Says Facebook's IPO to Be `Huge Bellwether' Washington Post 7 (Bloomberg) -- Carter Mack, president of JMP Group Inc., talks about the outlook for Facebook Inc.'s initial public offering. He speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." Emily Chang also speaks. |
UBS, Macquarie, CBA Land Genworth IPO - Wall Street Journal (blog)
UBS, Macquarie, CBA Land Genworth IPO Wall Street Journal (blog) Late last week, the three banks were given joint lead manager mandates for Genworth Financial Inc.'s initial public offering, or IPO, of its Australian mortgage insurance business, joining lead manager Goldman Sachs, people familiar told Deal Journal ... |
Roundy's IPO upsized, priced below range-underwriter - Reuters
Roundy's IPO upsized, priced below range-underwriter Reuters Feb 7 (Reuters) - Roundy's Parent Co Inc sold more shares than expected in its initial public but at a price that was below the expected range, according to an underwriter. The US supermarket chain operator sold 19.2 million shares at $8.50 each, ... Roundy's stock may begin trading Wednesday |
The Facebook Stimulus: How the $5 Billion IPO Could Change Silicon Valley - The Atlantic
 The Atlantic | The Facebook Stimulus: How the $5 Billion IPO Could Change Silicon Valley The Atlantic By Linda Himelstein The Bay Area tech scene is already booming, but the initial public offering of Mark Zuckerberg's company could shift the Valley economy into overdrive. Thanks to the impending, record-breaking Facebook initial public offering, ... |