Initial Public Offerings (IPOs) :: e-commerce Internet IPO Essays

Initial Public Offerings (IPOs)The term IPO slipped into eachday speech during the tech bull market of the belatedly 1990s. Back then, it seemed you couldnt go a day without hearing most a dozen new dot-com millionaires in Silicon Valley cashing in on their latest IPO. The phenomenon spawned the term siliconaire, which described the dot-com entrepreneurs in their early 20s and 30s who suddenly found themselves living large due to IPOs from their Internet companies.So, what is an IPO anyway? How did everybody give way so rich so fast? And, most importantly, is it possible for mere mortals like us to get in on an IPO? All these questions and to a greater extent will be answered in this tutorial.Before we continue, we suggest you check out our stock basics tutorial as well as brokers and online trading if you dont gull a solid understanding of stocks and how they trade.IPO Basics What is an IPO?Selling StockIPO is an acronym for Initial Public Offering. This is the first sale of st ock by a company to the public. A company passel raise money by issuing either debt (bonds) or equity. If the company has never issued equity to the public, its cognize as an IPO.Companies fall into two broad categories private and public.A privately held company has fewer shareholders and its owners dont have to disclose much information about the company. Anybody can go out and incorporate a company just put in some money, file the right legal documents, and follow the reporting rules of your jurisdiction. most(prenominal) small businesses are privately held. But large companies can be private too. Did you know that IKEA, Dominos Pizza, and Hallmark Cards are all privately held? It unremarkably isnt possible to buy shares in a private company. You can approach the owners about investing, but theyre not obligated to sell you anything. Public companies, on the new(prenominal) hand, have sold at least a portion of themselves to the public and trade on a stock exchange. This is w hy doing an IPO is also referred to as going public. Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of directors and they must report financial information every quarter. In the United States, public companies report to the SEC. In other countries, public companies are overseen by governing bodies similar to the SEC. From an investors standpoint, the most exciting thing about a public company is that the stock is traded in the open market, like any other commodity.