Emmanuel nice
Banned
Initial public offerings (IPOs) represent the transition point of companies from a private status to a publicly status.
Thus, IPOs represent one of the most closely observed events in the stock market since they mark the inception of a new trading opportunity. Since every business starts as a small enterprise, the new player on the stock market issues only a few stock, which results in a relatively small number of stockholders.
COMPANY REGISTRATION
The first step a company should take in order to become publicly traded includes registeration with the securities and exchange commission (The SEC). After this a public offering is prepared, which should include a company's prospectus and other legal document that are required by the SEC.
Every potential investor has the right to receive a company's prospectus. The latter represent a legal and accounting document, which explains in detail the situation in the company, including information about the senior staff, majority stockowners and the potential risks the company faces.
SETTING THE PRICE OF THE STOCK
After the company has registered with the SEC and met its other requirements, the company should contact with an investment bank(s) and sign a contract for the distribution of the shares the company is willing and able to sell. The other contractors may agree to underwrite the distribution of shares. After this both parties agree on an initial price at which the stocks to be opened for sake. This price is based on the earnings or potential earnings of the company as well as its growth. Additionally, considerations about the market's willingness to accept the agreed price should be made.
Thus, IPOs represent one of the most closely observed events in the stock market since they mark the inception of a new trading opportunity. Since every business starts as a small enterprise, the new player on the stock market issues only a few stock, which results in a relatively small number of stockholders.
COMPANY REGISTRATION
The first step a company should take in order to become publicly traded includes registeration with the securities and exchange commission (The SEC). After this a public offering is prepared, which should include a company's prospectus and other legal document that are required by the SEC.
Every potential investor has the right to receive a company's prospectus. The latter represent a legal and accounting document, which explains in detail the situation in the company, including information about the senior staff, majority stockowners and the potential risks the company faces.
SETTING THE PRICE OF THE STOCK
After the company has registered with the SEC and met its other requirements, the company should contact with an investment bank(s) and sign a contract for the distribution of the shares the company is willing and able to sell. The other contractors may agree to underwrite the distribution of shares. After this both parties agree on an initial price at which the stocks to be opened for sake. This price is based on the earnings or potential earnings of the company as well as its growth. Additionally, considerations about the market's willingness to accept the agreed price should be made.
