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BlauStein: Interesting Facts
Initial Public Offerings (IPO)
Initial Public Offering is:
- Primary public offering to investors to become shareholders of a company (Open Joint-Stock Society)
- Variety of organizational, jurisdictional and financial procedures
- One of the effective ways of attracting investment and a unique opportunity for entry into the world share market
The main goals of IPO:
- The possibility to attract valuable long-term financial resources
- Value increase of the remaining parcel of shares
- Establishment and maintenance of public company status
- Increase of company awareness in the market
- Future opportunity to sell the company’s parcel of shares at a higher price
- Corporative, operational, financial company management structure formation which meets the world’s requirements
The main tasks of issuer related to the IPO:
- Choosing an IPO scheme
- Choosing an underwriter (the main facilitator between company and investors)
- Due diligence
- Implementation of the set of measures on company restructure and information disclosure.
The main goal of a potential investor is to receive maximum future profit with minimum risk and diversification of investment portfolio. During preparation and performing of the Initial Public Offering the most important scope of functions for the investor are those which are connected to good estimation of company prospects, market risks related to the company’s activity and specific risks related to transactions under the jurisdiction of IPO, both financial and legal.