An IPO is an Initial Public Offering. This is the initial sale of stock to the public from private investors and holders of the company. There are several reasons why a company would issue stock to the public. Publicly traded stock allows the company to offer shares in mergers and acquisitions, easing the mechanism in purchasing other companies and lowering the cost. Publicly traded stock also allows the company to offer incentives to employees, by giving shares of stock. The greater exposure and publicity also help retain and attract talented employees and management. The value of a company is also higher compared to when it’s private. This is because increased levels of liquidity and transparency are more attractive to investors, who will allocate a higher multiple for the company’s value. The biggest downfall to a company issuing stock to the public is greater scrutiny from investors, as all financial records are made public. This comes in the form of an increase in legal and marketing costs, plus time spent with analysts and other investors explaining the inner workings of the company.
How Uber Has Earned a Surprising $40.0-Billion Valuation
Many companies get their start by capitalizing on an untapped niche market, but few have upended an entire industry like Uber. Fewer still have been as polarizing. Toss in a valuation of $40.0 billion and you can see why so many investors are hoping Uber lists publicly in 2015. B… Read More
Airbnb: Top IPO to Watch for 2015?
With oil prices tanking and fears the global economy might rout the markets, many investors are turning their attention to possible initial public offerings (IPOs) in 2015. After the successful launch of Alibaba Group Holding Limited (NYSE/BABA) and GoPro, Inc. (NASDAQ/GPRO)… Read More, the IPO watch is on f
How Snapchat Makes Money: Snapcash and Disappearing Ads
In the beginning, social media sites like Facebook, Inc. (NASDAQ/FB)… Read More were more of a passing curiosity than anything. What does my ex-girlfriend look like now? Where does my old roommate that I no longer bother keeping in touch with work? But in just a few short years, social medi
If there is one group of stocks that always seems to pay at the speculative end of the market, it’s restaurant stocks. And one company aggressive investors really need to have on their radar now is Zoe’s Kitchen, Inc. (ZOES).
Everything is a cycle, of course, but many money managers have sung the praises of this specific sector for y… Read More