IPO Initial Public Offerings
Information on Going Public
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List of Pertinent Considerations for IPO Filings
There are many things to think about before you decide to offer an IPO (Initial Public Offering). As the head of a private company, you have ultimate authority; as the CEO of a public company, you may have a radically different future. To make sure you have all your bases covered during the IPO process, consider these issues when consulting with your IPO guide:
1) Will Going Public Benefit the Company?
There are many huge and hugely profitable companies that have never gone public.
Right now, Koch Industries is one of the most vibrant and politically influential
organizations in the country, yet it is privately held. PricewaterhouseCoopers consistently
ranks as one of the top consultancies around the world and is also completely private.
Mars, Bechtel and Publix Super Markets are also on the list. While a huge capital infusion
is possible from an Initial Public Offering, is it truly necessary?
Experienced IPO advisors firmly believe that the life of a private company director is
not a simple one, regulatory issues become even more complex and problematic once you go public.
Just ask any executive about Sarbanes-Oxley requirements and you'll see the immense challenges
involved. If you are used to a management style that plays close to the vest -- similar to IKEA,
which is notoriously structured to ensure ownership remains tightly controlled -- you may not find
the IPO to be satisfying.
Failing to valuate your stocks properly reduces their value in the market whether
you overvalue you or undervalue them. Too many companies make the mistake of setting a
value that represents what the market will pay rather than a reflection of the company's
value. Valuation can begin before you even file with the SEC -- in fact, many IPO consultants
are of the opinion that it's never too early to begin your valuation.
The more portfolio managers agree to add your stock to their investments,
the more momentum you will gain. While federally mandated quiet periods restrict what you can say
about your securities, outside portfolio managers that you meet on your "road shows" are not bound
by the same rules and can keep the fire hot if they choose to do so independently.