Once the company and its advisors have set an initial price for the IPO, the underwriter issues shares to investors and the company’s stock begins trading on a public stock exchange, like the New York Stock Exchange (NYSE) or the Nasdaq. Why Do an IPO?
How are IPO shares priced?
IPO shares of a company are priced through underwriting due diligence. When a company goes public, the previously owned private share ownership converts to public ownership, and the existing private shareholders’ shares become worth the public trading price.
What is an initial public offering (IPO)?
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance for the first time. An IPO allows a company to raise equity capital from public investors.
Should a private company Plan an IPO?
A private company planning an IPO needs not only to prepare itself for an exponential increase in public scrutiny, but it also has to file a ton of paperwork and financial disclosures to meet the requirements of the Securities and Exchange Commission (SEC), which oversees public companies.
