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What happens when a company goes IPO?

When a company goes IPO, it needs to list an initial value for its new shares. This is done by the underwriting banks that will market the deal. In large part, the value of the company is established by the company's fundamentals and growth prospects.

Should a company go public in an IPO?

Going public in an IPO can provide companies with a huge amount of publicity. Companies may want the standing and gravitas that often come with being a public company, which may also help them secure better terms from lenders. While going public might make it easier or cheaper for a company to raise capital, it complicates plenty of other matters.

Why should a company pursue an IPO?

There are other reasons for a company to pursue an IPO, such as raising capital or boosting a company’s public profile: Companies can raise additional capital by selling shares to the public. The proceeds may be used to expand the business, fund research and development or pay off debt.

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