Ipo Essay

IPO

First, let me start by saying that the decision to go public by any private company is an enormous and significant one. It is one that requires a lot of work and effort and a number of stakeholders are required to be a part of it – to include members of the company’s board of management and other employees from within and outside the firm. There are the lawyers, underwriters, auditors, financial or tax advisors, to name a few, who are also required to be a part of the Initial Public Offering.

In order to help you with this question, the first thing I would like to do is to give you an idea of what is an Initial Public Offering. I would also like to highlight just a few of the reasons why private companies decide to go public and then to list a few of the advantages and disadvantages of going public. After doing this, I will place before you some important steps that must be taken by any company that is deciding to go public and information which relates to the timeline that is required to implement a public offering. I must mention, however, there is no set timeline for implementing a public offering and to a large extent it is dependent on the size of the company.

An Initial Public Offering (IPO) is the first sale of stock by a company to the public. Companies offering an IPO are sometimes new, young companies, or conversely, companies which have been around for many years but are finally electing to go public. IPOs are often risky investments, but often have the potential for significant gains. IPOs are often used as a way for a young company to gain necessary market capital. (Investor Words)

When a company decides to go public it is viewed as no longer been owned by a set of private individuals, but instead, it is viewed as now being owned by those individuals as well as by members of the public (shareholders). This ownership is acquired by shareholders through the purchase of shares in an Initial Public Offering (IPO) or even after an IPO....