1942 words 8 pages

Initial Public Offerings:
Presenting to Markets


Table of Contents
1. Introduction I. Defining IPOs II. Detailing Pros and Cons III. Hypothesis to Offering timeline
2. Taking a Company Public I. S.E.C. regulations II. Stages of Market Introduction
3. IPO Valuation I. General Valuation II. Underpricing a. Reasons for Underpricing b. Feedback of Advantages and Disadvantages
4. Longevity and IPO Performance I. Offering and Post-Offering Performance II. Proof of Longevity

This paper addresses the general IPO information. The process of going public is discussed, with emphasis on how the mechanics deal with potential conflicts of
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When going public, an issuing company will typically sell 20-40% of its stock to the general public. The issuer will hire investment bankers to assist in pricing the offering and marketing the stock. In cooperation with outside insights, the investment banker will also conduct a due diligence investigation of the company, write the prospectus, and file the necessary documents with the S.E.C. For younger companies, most or all of the shares being sold are typically newly-issued, the primary shares, with the proceeds going to the company. With older companies going public, it is common that many of the shares being sold come from existing stockholders, the secondary shares. An issuer will generally choose a lead underwriter on the basis of experience, specifically with IPOs in the same industry. Having a respected and capable analyst who will supply research reports on the firm in the years ahead is a major consideration. The investment bankers with large market shares of IPOs include, in addition to large investment banking firms have five firms that specialize in IPOs. After the preliminary prospectus, the red herring, because on the front page certain warnings are required to be printed in red, is issued, the company management and investment bankers conduct a marketing campaign for the stock. Regulations


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