IPO 101 What You Need to Know

Recently priced initial public offerings

Since FitBit’s IPO in 2015, the stock has risen by 50%. The IPO saw 36 million shares offered to the public with an IPO value of $741 million. Taking your business public can be a challenging but exciting time. Navigating the IPO process is difficult and specialist IPO services can be useful in helping you do this. Recently priced initial public offerings have been significant IPOs are increasing, with 2015 having been the best IPO season since the dot-com booms of the 2000s. ETSY, with its 94% rise on its indicated price, Shopify Inc with 65% up on its price, and FitBit have been the top-performing companies from the sector.

Institutional investors who are willing to buy large quantities of a stock before a company’s IPO debut can benefit from such public offerings. Companies can reap triple-digit gains on the first day after an IPO through such hedge funds and investment banks. Most IPOs offer about 10% to 15% of a company’s stock for sale, and IPO prices tend to be 13% to 15% lower than regular trading price. About 45% of companies using secondaries in the second quarter of 2015 had positive first-day performance, just on 2% were unchanged, and approximately 53% were down on the first day.

IPO services can help companies through the process of an initial public offering and capitalize on the potential benefits of such an IPO. A lock-up period, which is a three to 24 month legally binding contract drawn up between the insiders of the company and the underwriters, is usually in most IPOs. This prohibits the selling of shares or stock for a specified period. An IPO firm that offers consultation services will assist with the negotiation of such terms.

IPOs tend to do well when the markets are doing well. So, for example, if you think that the SandP 500 will grow in double digitals in a particular year, it is likely that IPOs will outperform that benchmark and be up. Going public is a way to grow your business and access funds without the need to pay a fixed return . As IPOs continue to grow, more and more start-ups and other businesses wanting to go public will require the services of an IPO company.

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