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Initial Public Offering Article
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Initial Public Offering Made Netscape an Internet Browser Giant
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IPO.
Single acronym, yet with different meanings and applications.
It may stand for intellectual property ownership. It may also stand for the Instituto Portugues de Oncologia or the Portuguese Oncology Institute which is situated at the University of Porto in Portugal. It may probably refer to the Israel Philharmonic Orchestra which is one of the leading symphonic orchestra in Israel and one of the best-performing orchestra around the world.
However, when you are talking about the IPO in the world of finance, it only spells three distinctive words.
Initial public offering.
Initial public offering or referred to by its acronym IPO, is basically the first sale of a company’s common stocks to the public, which is why it is called “company that will go on public”. One of the major reasons why companies go on public is to raise additional capital that will be used to sustain their operational expenses. Although companies undergoing the IPO process must adhere to the heavy legal requirements imposed by the governing laws and authorities, IPO is considered to be an effective method in raising additional capital for a company.
Typically, an IPO process involves several investment banks that will act as the underwriters for the deal. The company will enter an agreement with a lead underwriter that will facilitate the public issuance of their common shares to the public. The issuer (or the company issuing the common shares) must draft a prospectus that will show the details of the company’s background, history, products, operations, industry environment, and other related factors.
Such prospectus will be submitted to the U.S. Securities and Exchange Commission (SEC) for approval. Once approved, the price of the common shares will be finalized, and the IPO will now be on the “free riding period” wherein the shares will be offered to the public in different ways.
In most cases, newly-formed and not well-known companies are the ones involved in the IPO process. However, there are large corporate organizations that go on public to further raise funds to sustain their growing business operation. One of which is the Netscape.
Netscape, or formerly known as the Netscape Communications Corporation, is an American-founded computer application company, which is best known for their Internet-browsing products and services. The Netscape browser was dominant before in terms of usage share. However, with the competition among different browsers, Netscape have lost their user base within that particular area. As a result, the usage share of Netscape browsers is now under 1 percent and still falling slowly.
Netscape went public for the first time in April 1994. They have filed before the Securities and Exchange Commission for an initial public offering of 3.5 million shares of common stocks to the public. After the completion of the IPO process, Netscape were able to grow faster than any other existing software company in terms of revenues. Their initial market value was now around $ 1 billion against the $200 or $300 million of other computer application companies. In addition, they have enough cash to pay for their additional expenditures.
Netscape existed as an independent company from 1994 up to 2003 before they became the subsidiary of the America On Line (AOL). However, the Netscape brand is still in use.
Although the Netscape is now a subsidiary of another large Internet-based company, it showed that through IPO, additional capital to pay for additional expenses and increased market value is a possibility.
Initial Public Offering Specific links
Initial Public Offering News
Bruker Energy & Supercon plans $100M IPO - BusinessWeek
Bruker Energy & Supercon plans $100M IPO BusinessWeek In the filing, made Friday, the company said it will use the cash from the IPO to pay down debt, expand its production capacity and for research and ... Billerica-based Bruker unit files for $100M IPO Bruker Energy & Supercon files for $100 mln IPO Bruker Energy & Supercon Technologies, Inc. Files Registration Statement for ... |
GM IPO tour timetable emerges - The Detroit News
 Moneycontrol.com | GM IPO tour timetable emerges The Detroit News A person briefed on the matter confirmed GM's plan for a post-election investors' road show, followed by the initial public offering of its stock a few ... GM "Road Show" for IPO To Start After November Elections GM IPO scheduled for November 18 GM's IPO Reportedly to Price Nov. 17 |
Venture investors get $560 million in 3Par deal - San Francisco Chronicle
 Reuters India | Venture investors get $560 million in 3Par deal San Francisco Chronicle That's a break from the usual pattern, where venture investors unload their stock after the IPO. On Thursday, 3Par agreed to a $2.35 billion takeover by HP ... Early 3Par investors to reap $560 million |
AIG To Move Ahead With Asian Unit IPO (AIG) - Benzinga
 Telegraph.co.uk | AIG To Move Ahead With Asian Unit IPO (AIG) Benzinga AIG (NYSE: AIG) is moving ahead with its initial public offering for its Asian unit, the Wall Street Journal reported. This comes as AIG attempts to pay ... AIG Asia Unit Said to Submit Preliminary Application for IPO AIG Sets AIA Group IPO In Motion AIG files application to list AIA -source |
US Treasury mulls over foreign investors in GM IPO-WSJ - Reuters
Moneycontrol.com | US Treasury mulls over foreign investors in GM IPO-WSJ Reuters UL] proposed initial public offering, the Wall Street Journal said. The Treasury is cautious because it is looking to minimise any political fallout from ... US Frets Over Foreign Investors in GM |