When private companies want to raise funds for growth or expansion they can go public. Going public means that the company has decided to sell its shares which were privately held. You can invest in the funds of these new entrants. Till the company goes public you cannot buy its shares.
Ipo or Initial Public Offer gives the opportunity to the investors to invest early in the shares of a company. An ipo is also called public offering. When a company want go public it can initiate the ipo process. The news of a company going public is called the ipo news. You can get upcoming ipo updates, current issues, forthcoming issues, closed issues and new listings from your broker. Many online websites offer the ipo information.
The advantages of ipo service
There are many advantages of going public
- The shares of the company are available to the public and can be traded in the open market.
- The company can raise large sum of money by going public.
- The company get higher financial opportunities like higher interest rate when they issue debt
- Even if the company goes public the large part of the shares are retained by it and only cofounders can influence on the direction of the company.
Why invest in ipo
- These are the reasons for investing in an ipo
- Early investments have the potential for higher returns
- In some cases Long term investments can lead to multi-fold earnings
- You can make rapid short term gains in some cases
A company goes public after careful analysis to maximize the returns of the early investors and raise money. When the company can raise the funds the ability of the company to grow increases. The investors are always ready to invest early to make high returns. The ipo price for a share are lower than compared to the price in the trade market.
When there is more demand for the shares than the number of shares issued the company is called oversubscribed. A company cannot sell the shares on its own. It needs brokers who can sell their first shares to the investors. A broker is a person between the company and the investors.
When a company goes public it will need a good management team to run the company once it is public. The company will need to form board of directors who have to give financial and accounting information every quarter.