def. Initial Public Offering. A private company chooses to raise money by selling ownership (=Securitys). The following is the process:
- Pitch. Company looks for Investment Banks that will help with their IPO (i.e. find the bankrunner or underwriter). Often a syndicate of banks.
- Each banks pitch
- Roadshow/Marketing. Announce to the public that you’re doing an IPO.
- Bookbuild. Gauge Investor demand. Due Diligence on the books.
- Pricing. Value the Company and divide by the number of shares exist.
- Q. How many exchanges to they list on?
- A. Shares that are traded are same at any exchange. They only need to list at one, the benefit of listing at multiple is that people can trade at multiple exchanges for their shares so may be more liquid. But these days no need to since internet.
- Q. How many shares do you sell?
- A. When you found a company you declare on the document (legally) that your company will have number of shares, probably all held by you. In an IPO, you can decide out of how many you want to sell to the public.