Initial Public Offering (IPO): Why Do Companies Go Public?

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Initial Public Offering (IPO) Why Do Companies
Go Public?
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Initial Public Offering (IPO) Why Do Companies
Go Public?

• What does IPO stand for? The process of selling
  shares of stock to the public by a private
  company is known as an initial public offering
  (IPO). It also means that a company's ownership
  is changing from private ownership to public
  ownership. The IPO process is also commonly
  referred to as "going public." in business
  communication.

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What is an IPO?

• In an initial public offering (IPO), after a
  company has decided to go public, it hires a lead
  underwriter and assembles a syndicate of
  investment banks and broker-dealers (a group
  known as a syndicate) that is responsible for
  distributing shares of the IPO to investors.

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What is an IPO?

• Stock exchanges are required by law to maintain
  at least two trading specialists who always
  participate in offering new issues, so as to
  ensure liquidity. The IPO process begins when a
  private company decides to sell stock to the
  public for the first time, typically because it
  wants more capital or growth opportunities, or
  for liquidity reasons.

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What is an IPO?

• Then what is an IPO in the share market? An IPO
  process is sometimes referred to as "going
  public". Investors are purchasing shares of
  common stock or preferred stock via
  exchange-listed security like regular stocks and
  bonds.

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The History of IPOs

• The term initial public offering (IPO) has always
  been a buzzword on Wall Street and among the top
  investors for decades. The first modern IPO was
  conducted by the Dutch when they offered shares
  of the Dutch East India Company to the general
  public.

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The History of IPOs

• Many companies view IPOs as the best way to raise
  funds because they can use the money to invest in
  growth. By selling stock on an exchange,
  investors gain access to ownership and
  performance data of a company.

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The History of IPOs

• The difference between an IPO and other
  investments is that stocks purchased through an
  IPO are sold at a fixed price (versus auction)
  while they trade freely on the open market.
  Because of this, there's potential for
  astronomical gains (and losses).

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How does an Initial Public Offering (IPO) Work?

• To raise capital and access a vast new pool of
  investors, many companies decide to take on the
  responsibilities and hardships of being a
  publicly traded company. This can be accomplished
  through an initial public offering (IPO).

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How does an Initial Public Offering (IPO) Work?

• What does IPO mean in stocks? An IPO is the first
  time a business sells shares of itself to the
  public. The company offers its stock on the stock
  exchange with other companies and investors. In
  order to do this, they must first go through
  legal processes with the Securities and Exchange
  Commission (SEC) as well as numerous audits and
  other regulatory requirements.

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How does an Initial Public Offering (IPO) Work?

• People can go online on their mobiles, laptop, or
  computers to buy these stocks using their Demat
  accounts.

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Why Do Companies Go Public?

• The concept of going public dates back to the
  early 1800s. At that time, most companies were
  private they were owned by a small group of
  investors or by one person.

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Why Do Companies Go Public?

• The concept of ownership and equity in a company
  was not widely understood nor was it widely
  practiced by investors. When a company goes
  public, it offers its stock to the public so the
  owners have more investment capital to grow the
  business.

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Why Do Companies Go Public?

• This allows them to issue debt securities listed
  on a major exchange to raise further capital.
  Going public allows businesses to lower their
  cost of funds, attract better talent and increase
  liquidity and diversification for investors.

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