IPO Services Orangeville ON

They say on Wall Street that the best way to get rich is to buy a dollar for 50 cents, over and over again.

That’s the general idea behind initial public offerings – the financial market’s mechanism for buying stocks of newly minted public companies for a low price and selling them down the road – sometimes not too far down the road – at a higher price.

IPOs aren’t as complicated as some might think. By definition, an initial public offering is the process by which a private company turns into a public company. With an IPO, the company makes shares of its stock – known on Wall Street as “equity” – available to investors. Usually, those shares trade on a public exchange, like the New York Stock Exchange or NASDAQ.

Preparing an IPO is similar to rearing a child, experts say.

“A new public issue is actually the culmination of years of hard work, market positioning, rounds of financing and business success – rather like sending a child to college,” says Brendan Dougher, a partner at Florham Park, N.J.-based PricewaterhouseCoopers, which specializes in IPO consulting. “The parents' job is to prepare Junior well enough to be successful on his or her own. Offering a company to the public is no different.”

There are three key phases in the IPO process:

Phase 1 – Choose a Manager

Companies looking to go public first have to hire a financial advisor (the “underwriter”), usually an investment bank, to run interference and manage the IPO. Some companies prefer bigger inve...

Author: Brian O'Connell

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