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Initial Public Offering Article
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How The Initial Public Offering Process Works
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In business, finance, and trade, process is an essential ingredient to complete the recipe of a successful commercial result. It typically involves inputs (pre requisite data that must be entered before any method can be put into place), different methods, and outputs (the expected results once methods have been applied to the inputs).
In addition, it is a collection on interrelated structural activities that generates something of value for a corporate organization, its stakeholders, and/or its clientele. In other words, the process that a corporate organization will adopt will help them realized the services that they are offering to the public.
It works like a cookbook wherein the ingredients are prepared first before proceeding to the step by step procedure of cooking a particular dish or cuisine. Once the ingredients and the procedures have been satisfied, you will be able to arrive with a very delicious meal which you can enjoy. Such delicious meal represents the achievement of a corporate organization in terms of excellent delivery of products or services to the public and generated revenue for the company.
Process does not limit itself on corporate organizations. Even external matters require process in order to facilitate smooth flow of the application to the business community. One of which is the initial public offering.
Also referred to as IPO, initial public offering is the first or the initial sale of a companys common shares to the public. It is primarily for raising additional capital or funds for a company that will be used to sustain its growing needs (production, distribution, and others). The term merely applies to initial issuance of common shares to interested public investors. Thus, any late issuance of common shares will be referred to as a secondary market offering.
The IPO process involves rules and regulations imposed under different governing laws and bodies, such as the Federal Securities Act of 1993 and the U.S. Securities and Exchange Commission, respectively. In addition, state laws affect the IPO process, though there are exceptions applicable especially of the common shares are listed with a major stock exchange such as the NASDAQ and the NYSE.
The process generally starts with the company selling the common shares to the public (the issuer) to draft a prospectus. Such prospectus contains the details about the companys history, background, finances, offered products and/or services, industry environment, and other related information. The Securities and Exchange Commission actively scrutinizes the content of individual IPO prospectus before proceeding to approval. Companies going public typically employ the services of major law firms during the drafting process.
After the SEC approved the prospectus, the prices of the common shares are now finalized and the IPO will now be entered into a free riding period. The underwriters, which are composed of several investment banks, will now offer the common shares for sale to the public in various ways. All offers that will be made must have an accompanying copy of the approved IPO prospectus. Any misleading and false statements are strictly prohibited while the offering of common shares for sale within this period is going on.
The executives of the company going on public will be held responsible for any misleading information or omissions on the prospectus. In the same manner, the underwriters will also be held liable if they failed to conduct a reasonable investigation about such misleading information or omissions.
Initial public offering involves a process, which will keep IPO flowing smoothly and protected against individuals or groups who want to take advantage of the process itself.
Initial Public Offering News
Facebook IPO proves anti-climatic: Why waiting was wise - newjerseynewsroom.com
 The Hindu | Facebook IPO proves anti-climatic: Why waiting was wise newjerseynewsroom.com BY BOB HOLT The initial public offering of Facebook Friday on the Nasdaq has been the talk of Wall Street this week. And the consensus of talk among investors and analysts was "wait before you buy." That may prove to be true based on yesterday's ... With Facebook's announcing plans for IPO, a look at how other IPO stocks have ... Facebook $16 Billion IPO Seen as Fuel for Strategic Deals: Tech Update: Facebook IPO stumbles out of the gate |
Facebook IPO Overshadowed By Multi-billion Dollar Lawsuit - RedOrbit
 RedOrbit | Facebook IPO Overshadowed By Multi-billion Dollar Lawsuit RedOrbit On what should have been Facebook's biggest and brightest day, the company's initial public offering on Friday was overshadowed by an unprecedented $15 billion class action lawsuit filed against the social network for violating its members' privacy by ... Facebook IPO: Stock Falters, Still Raises $16 Billion Facebook IPO is Benchmark For Social Media If Facebook's IPO goes south, social, tech markets could take a hit |
Facebook IPO fails to boost market - The Desert Sun
 USA TODAY | Facebook IPO fails to boost market The Desert Sun It's going to take more than Facebook's initial public offering to push the stock market higher. Facebook shares rose 23 cents above their $38 offering price. It seemed like everything else fell. The Dow Jones industrial average has been in a slump ... Stocks end another bad week: Market sinks after Facebook IPO US stocks edge higher ahead of Facebook IPO Stocks: Facebook IPO vs. Europe worries |
Underwriters to split $176m for managing initial public offering - gulfnews.com
 Chicago Tribune | Underwriters to split $176m for managing initial public offering gulfnews.com New York: Facebook bankers led by Morgan Stanley will split about $176 million (Dh646 million) for managing the social networking company's initial public offering after accepting a lower-than-average fee for their work. The underwriters are collecting ... Morgan Stanley made big bet on Facebook Facebook Banker Morgan Stanley Bought A Humongous Amount Of Stock To Try ... |
Facebook tax loophole draws fire - CBS News
 CBS News | Facebook tax loophole draws fire CBS News (MoneyWatch) Newly public technology titan. Cultural icon. Tax-dodger? Even as Facebook (FB) today lifted the curtain on its initial public offering, the Internet company is already being accused of seeking to avoid paying its fair share in taxes. Facebook IPO catches lawmakers' attention Facebook's Saverin to Pay 'Hundreds of Millions' in Tax Eduardo Saverin Congratulates Mark Zuckerberg … on Facebook |
FACEBOOK IPO LIVE: The social network goes public - Kansas City Star
 Kansas City Star | FACEBOOK IPO LIVE: The social network goes public Kansas City Star The world's definitive online social network raised $16 billion in an initial public offering that values the company at $104 billion. The site, which was born in a dorm room eight years ago and has grown into a worldwide network of almost a billion ... |
Renren Declines Most on Record as Facebook IPO Optimism Fades - Bloomberg
 China Daily | Renren Declines Most on Record as Facebook IPO Optimism Fades Bloomberg Renren Inc. (RENN) fell the most on record as Facebook Inc. (FB)'s initial public offering failed to boost investors' confidence in the Chinese social networking website that won't turn profit until late 2013. Beijing-based Renren tumbled 21 percent, ... Is China the next big step for Facebook after IPO? Facebook faces challenge in China |