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What exactly
is an IPO?
If you have been listening to recent finance or economics
new you must have heard this term being used quite often.
So todayโ€™s letโ€™s see what exactly is an IPO?
>>IPO stands for Initial Public Offering, it is the process by
which a company can go public by offering itโ€˜s shares for sales to
the general public to purchase .
>> After this the company is listed on the stock exchange.
>>Originally only the founders and initial investors own the
company. After IPO a company will have possibly hundreds
of thousands shareholders.
>>Going public can be risky. The company is now
accountable to a huge number of shareholders.
>>It now has to have periodic audits and scrutiny from
shareholders can also lead to shareholder lawsuits.
>>This process is a long expensive and exhaustive process
taking months. The firm will need to hire lawyers,
consultants, accountants and investment bankers
With all these possible problems why would a
company want to for an IPO?
>>Well IPO helps firms acquire a huge amount of capital.
>>This will help them expand, improve and have enough
resources to hire a good workforce and senior
management.
>>IPOs also are a means for the initial investors or founders
to have an exit by selling their shares.
>>Thus IPO has its pros and cons and a firm must properly
analyse the market and whether this risk would be worth it.
>>It is not necessary to go public to be successful, Sweden
furniture giant IKEA is a private company.
I hope this was helpful, if youโ€™d like to read more
about IPOs do read my blog post, the link is in my bio

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What is an IPO?

  • 2. If you have been listening to recent finance or economics new you must have heard this term being used quite often. So todayโ€™s letโ€™s see what exactly is an IPO?
  • 3. >>IPO stands for Initial Public Offering, it is the process by which a company can go public by offering itโ€˜s shares for sales to the general public to purchase . >> After this the company is listed on the stock exchange. >>Originally only the founders and initial investors own the company. After IPO a company will have possibly hundreds of thousands shareholders.
  • 4. >>Going public can be risky. The company is now accountable to a huge number of shareholders. >>It now has to have periodic audits and scrutiny from shareholders can also lead to shareholder lawsuits. >>This process is a long expensive and exhaustive process taking months. The firm will need to hire lawyers, consultants, accountants and investment bankers
  • 5. With all these possible problems why would a company want to for an IPO? >>Well IPO helps firms acquire a huge amount of capital. >>This will help them expand, improve and have enough resources to hire a good workforce and senior management. >>IPOs also are a means for the initial investors or founders to have an exit by selling their shares.
  • 6. >>Thus IPO has its pros and cons and a firm must properly analyse the market and whether this risk would be worth it. >>It is not necessary to go public to be successful, Sweden furniture giant IKEA is a private company.
  • 7. I hope this was helpful, if youโ€™d like to read more about IPOs do read my blog post, the link is in my bio