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Initial Public Offering Process: How it is Done?
from: ForsgrensIn business, finance, and trade, process is an essential ingredient to complete the recipe of a successful commercial result. It typically involves inputs (pre-requisite data that must be entered before any method can be put into place), different methods, and outputs (the expected results once methods have been applied to the inputs).
In addition, it is a collection on interrelated structural activities that generates something of value for a corporate organization, its stakeholders, and/or its clientele. In other words, the process that a corporate organization will adopt will help them realized the services that they are offering to the public.
It works like a cookbook wherein the ingredients are prepared first before proceeding to the step-by-step procedure of cooking a particular dish or cuisine. Once the ingredients and the procedures have been satisfied, you will be able to arrive with a very delicious meal which you can enjoy. Such delicious meal represents the achievement of a corporate organization in terms of excellent delivery of products or services to the public and generated revenue for the company.
Process does not limit itself on corporate organizations. Even external matters require process in order to facilitate smooth flow of the application to the business community. One of which is the initial public offering.
Also referred to as IPO, initial public offering is the first or the initial sale of a company’s common shares to the public. It is primarily for raising additional capital or funds for a company that will be used to sustain its growing needs (production, distribution, and others). The term merely applies to initial issuance of common shares to interested public investors. Thus, any late issuance of common shares will be referred to as a secondary market offering.
The IPO process involves rules and regulations imposed under different governing laws and bodies, such as the Federal Securities Act of 1993 and the U.S. Securities and Exchange Commission, respectively. In addition, state laws affect the IPO process, though there are exceptions applicable especially of the common shares are listed with a major stock exchange such as the NASDAQ and the NYSE.
The process generally starts with the company selling the common shares to the public (the issuer) to draft a prospectus. Such prospectus contains the details about the company’s history, background, finances, offered products and/or services, industry environment, and other related information. The Securities and Exchange Commission actively scrutinizes the content of individual IPO prospectus before proceeding to approval. Companies going public typically employ the services of major law firms during the drafting process.
After the SEC approved the prospectus, the prices of the common shares are now finalized and the IPO will now be entered into a “free riding” period. The underwriters, which are composed of several investment banks, will now offer the common shares for sale to the public in various ways. All offers that will be made must have an accompanying copy of the approved IPO prospectus. Any misleading and false statements are strictly prohibited while the offering of common shares for sale within this period is going on.
The executives of the company going on public will be held responsible for any misleading information or omissions on the prospectus. In the same manner, the underwriters will also be held liable if they failed to conduct a reasonable investigation about such misleading information or omissions.
Initial public offering involves a process, which will keep IPO flowing smoothly and protected against individuals or groups who want to take advantage of the process itself.
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Initial Public Offering Specific links
Initial Public Offering News
Kosmos Energy Owners MullInitial Public Offering, Financial Times Reports
The private equity owners of Kosmos Energy LLC are considering a potential initial public offering of the Texas-based oil exploration company, which would value it at about $5 billion, the Financial Times reported, without saying where it got the information.
Read more...Statoil Plans Initial Offering for Fuel and Retail Unit in Fourth Quarter
Statoil ASA , Norway’s largest oil company, submitted an application for an initial public offering of shares in its fuel and retail unit in Oslo later this year.
Read more...Xinjiang Goldwind to Cut Hong Kong Initial Offering Size, Caijing Reports
Xinjiang Goldwind Science & Technology Co. will cut the amount it plans to raise in a revived initial public offering plan for Hong Kong, Caijing reported today, citing an unidentified person from the company.
Read more...BEST files initial public offering of common stock
Bruker Corporation,a leading global provider of high-performance scientific instruments, and Bruker Energy & Supercon Technologies, Inc. ("BEST"), a leading provider of superconducting technology and enabling tools and a Bruker subsidiary, today announced that BEST has filed a Form S-1 Registration Statement with the United States Securities and Exchange Commission relating to the proposed ...
Read more...Hitachi May Plan Initial Public Offer For Hard-Drive Unit, Reuters Says
Hitachi Ltd. may plan an initial public offering of its hard-drive unit by the end of the year, Reuters said, citing several people familiar with the situation.
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