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What is an IPO?
//A Short Thread//
//A Short Thread//
1. IPO stands for initial public offering
This is when a private company offers shares of the business to the public
By doing this a company can raise cash for business operations
This is listed as a liability on the balance sheet
This is when a private company offers shares of the business to the public
By doing this a company can raise cash for business operations
This is listed as a liability on the balance sheet
2. These shares are sold to institutional and retail investors
Companies hire investment banks to gauge demand and set the IPO price etc
The IPO can be seen as an exit strategy for early investors and founders to fully realize their gains.
Companies hire investment banks to gauge demand and set the IPO price etc
The IPO can be seen as an exit strategy for early investors and founders to fully realize their gains.
3. A comapnies SEC fillings also become public during this time.
The company is required to be fully transparent with business operations so investors can be informed
Warren Buffet’s guidance on investing in IPOs is: don’t.
The company is required to be fully transparent with business operations so investors can be informed
Warren Buffet’s guidance on investing in IPOs is: don’t.
Although the company must be transparent
There isn’t enough data immediately available for strong due diligence
He recommends waiting at least five years before investing
Anything less is a speculation.
There isn’t enough data immediately available for strong due diligence
He recommends waiting at least five years before investing
Anything less is a speculation.
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