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What happens in an IPO? – A Beginner's Guide (Part 2/2)

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Re: What happens in an IPO? – A Beginner's Guide (Part 2/2)

#5

I've been through two IPOs (one as insider, one as outsider) and watched a friend (co-founder in his company) go through one recently. This was a pretty good summary but didn't capture nearly the level of stress and anxiety involved. ;)

I've been part of taking a number of software companies public and it's always a taxing process because of the amount of work to be done and regulations to be observed. I have massive respect for the executives who can manage this process. The timeline described here seems approximate to what happens, though I imagine it looks and feels slightly differently depending on where you're sitting.

Re: What happens in an IPO? – A Beginner's Guide (Part 2/2)

#9
post #8

In my opinion, an IPO from a competent organization will release at a price that remains stable throughout the first week or so. If it goes up, the people who helped you with the IPO pocket it, and if it goes down everyone loses.

If it goes down the owners do the company have in a sense “won” - they sold their stock for more than what it was worth

Re: What happens in an IPO? – A Beginner's Guide (Part 2/2)

#10
post #9
post #8

In my opinion, an IPO from a competent organization will release at a price that remains stable throughout the first week or so. If it goes up, the people who helped you with the IPO pocket it, and if it goes down everyone loses.

If it goes down the owners do the company have in a sense “won” - they sold their stock for more than what it was worth

Except a bunch of their shares will be locked in for 180 days. So if it leads to a long term undervaluation it might be negative in the long run.
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