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Initial Public Offering of Shares—Is it the Best Option for your Corporate Organization?
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Going public or not?
That is one question that pops out of the minds of different corporate directors and executives of growing companies. The consistent growth of their operation translates to revenues. In order to maintain the flow of revenues, different corporate directors and executives must sustain the growth of the company by infusing additional investment.
Securing a corporate loan is a good idea, but undergoing an initial public offering is probably the best idea that corporate directors and executives can arrive into. Why get the company into debt when the company’s assets such as common shares could be used to raise additional capital that will sustain the company’s continuous growth?
IPO or initial public offering is the first or initial sale of a company’s common shares to the public, which is why it is also referred to “going public”. The most convincing reason why many companies are going public is because it is the most convenient and probably the safest way to raise capital that will be used to sustain operational expenditures.
However, there are still some “strings attached” to this process. Though it’s other reasons such as easy access to much needed capital, increased employee compensation and liquidity due to additional funding, prestige, and publicity are compelling, there are still pointers that you must consider when deciding if initial public offering is the right option of for you to take.
Remember what happened to Netscape when it went public in April 1994? They became the prestigious computer application company that rose above its competitor, with its actual market value reaching $1 billion. However, the executives lost control of the company and even the company itself, which resulted to the selling of the company’s interest to America On Line (AOL). Many investors think that they can capitalize from the revenues generated through IPO, and yet what happened is that the company itself suffered.
Before getting into an IPO process, make sure that your company is “sexy enough” for investors. In other words, your marketing ideas (the industry and the products or services that you offer to the public) are extremely popular to the consumer, which makes it very appealing to the investors. That is why IPO is not ideal for starting and not-well known companies because the risk of losing any infused investment due to unpopularity of its marketing ideas is present. Better assess your marketing ideas first before jumping into IPO.
Do you really understand why you are going into public? You must look the revenues that will be generated on IPO as an “emergency fund” and not as a “luxurious fund”. If the company’s present financial bucket could still sustain the growth of the company and the presence of an explosive growth needs to be seen, there is no reason to go in public. It will just create little benefits to the executives as well as to the future shareholders.
Do you have the necessary funds that you will spend when going public? Keep in mind that there are corresponding expenditures in each stage along the process. For instance, you must have a well-established business plan in order to answer the disclosure document questions, which is an essential part in convincing investors with regards to the viability of your IPO. Creating a well-established business plan alone will cost you as much as $20,000.
Is the initial public offering the best option that you can choose? It requires careful assessment and evaluation of various factors. Do not be attracted by fame and publicity—it can easily kill you.
Initial Offering Public Specific links
Initial Offering Public News
Caesars IPO giving investors new out - The Associated Press
 Bloomberg | Caesars IPO giving investors new out The Associated Press LAS VEGAS (AP) — An initial public offering of a tiny slice of Caesars Entertainment Corp. is allowing dozens of investors who bought into what once was the world's largest gambling company to get out with smaller losses than they might have seen. Caesars Entertainment soars in IPO Caesars Surges in First Day of Trading Caesars Rises as Much as 50% in Debut |
More Facebook SEC Filings Offer New Insight Ahead of IPO - PC Magazine
 Los Angeles Times | More Facebook SEC Filings Offer New Insight Ahead of IPO PC Magazine Those details and more were included in new Facebook documents and amended filings that appeared on the Securities and Exchange Commission website late Wednesday following the company's S-1 filing last week for its initial public offering. Facebook amends IPO filing with new details Facebook Amends IPO Filing To Show Zynga Partnership Details Facebook founder Mark Zuckerberg could face $2 billion tax bill after IPO |
FX Alliance prices IPO below range -underwriter - Reuters
FX Alliance prices IPO below range -underwriter Reuters Feb 8 (Reuters) - FX Alliance Inc priced its initial public offering of common stock at $12 per share, below its expected price range, according to an underwriter. The New York-based company, which provides electronic foreign exchange trading solutions ... FX Alliance IPO prices at $12 a share, below range |
Groupon's Growing Pains - Wall Street Journal
 The Guardian | Groupon's Growing Pains Wall Street Journal By SHAYNDI RAICE Groupon Inc. went public on the promise of fast growth and future profits. But on Wednesday, some of those promises remained elusive. In its first major test since an initial public offering in November, the Chicago-based daily deals ... Groupon posts 4th-quarter loss, sharply higher revenue in first report since ... Groupon Shares Tumble After First Public Earnings Announcement Falls Well ... Groupon investors watch closely as firm posts first results as public company |
Grocery analyst is skeptical about Roundy's IPO - BizTimes.com (Milwaukee)
Grocery analyst is skeptical about Roundy's IPO BizTimes.com (Milwaukee) Milwaukee-based Roundy's Inc. today launched its initial public offering of 19.2 million shares of common stock priced $8.50 per share. The shares are traded on the New York Stock Exchange under the ticker symbol “RNDY.” Roundy's is offering 14.7 ... Roundy's Announces Pricing of its Initial Public Offering Roundy's stock ends first day of trading on NYSE at $9 per share Roundy's Prices IPO Of 19.18 Mln Shares At $8.50/shr - Quick Facts |