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.
Coming off a banner year of 273 initial public offerings (IPOs) in 2014, there’s much anticipation surrounding a possible Uber IPO in 2015.Uber’s $41.0-Billion ValuationAs far as IPOs go, 2014 was a significant year. The last time the markets saw so much activity was during the halcyon days of the dot com era, when 400 companies debuted. Read More
SpaceX IPO the Final Frontier?Is an initial public offering (IPO) the final frontier for SpaceX? Investors might be interested in gravitating toward a SpaceX IPO, but the company doesn’t seem to be in any rush to jettison private life.SpaceX, a sort of private NASA, was founded in 2002 by Elon Musk. No one-hit wonder, Musk is also famous. Read More
How Does Snapchat Make Money: Snapcash and Disappearing AdsIn the beginning, social media sites like Facebook, Inc. (NASDAQ/FB) 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 media. Read More
The current initial public offering (IPO) market in some circumstances reminds me of the glory days back in 1999 and 2000; when newly minted technology stocks with little business surged to superlative heights driven by euphoric frenzy buying. While the valuation back then was far more out-of-whack than currently, there are situations. Read More
The Shopify initial public offering (IPO) date is set for May 21, 2015. The e-commerce software provider will be listed on the New York Stock Exchange under the ticker symbol “SHOP.”With more than 162,261 merchants using its platform, Shopify enables small to medium-sized businesses to design and manage online storefronts. Below. Read More