Google, the world’s Internet search engine giant, went public in April 30, 2004 in effort to raise $2.7 billion worth of additional investments.
The Madison River Communications Corporations also went public in December 23, 2004.
Telemar Participacoes SA pulled out their initial public offering last August 16, 2006, due to changes in market conditions. It is the biggest cancellation of IPO this year, with over $1 billion worth of IPO withdrawn. In addition, a total of $3 billion worth of IPO have been withdrawn so far in August, making it the worst month for cancellations for 2006.
In business, profits always come with costs.
For instance, if you own a homemade ham business, you need to spend for the raw materials (raw meat, different spices, and packaging) and for the marketing of your homemade ham (renting a stall in the meat section of a market) before you will be able to receive your profits out of the products that you have sold. In other words, if you will not spend initially on something, there is no chance that you will generate any profits later on.
The year 2004 has different designations and contains different significant events from around the world.
Aside from being one of the leap years of the Gregorian calendar and the Year of the Monkey in the Chinese calendar, 2004 were also designated by the United Nations as the International Year of Rice; by the United Nations Educational, Scientific, and Cultural Organization (UNESCO) as the International Year of Commemorating the Struggle Against Slavery and its Abolition; and by the World Health Organization as the Road Safety Year.
Single acronym, yet with different meanings and applications.
It may stand for intellectual property ownership. It may also stand for the Instituto Portugues de Oncologia or the Portuguese Oncology Institute which is situated at the University of Porto in Portugal. It may probably refer to the Israel Philharmonic Orchestra which is one of the leading symphonic orchestra in Israel and one of the best-performing orchestra around the world.
However, when you are talking about the IPO in the world of finance, it only spells three distinctive words.
Initial public offering.
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.
Seventy percent of the human body is composed of water. Thus, every human being needs water for life support. There are many incidents wherein individuals survived for several weeks by just drinking water.
Trees and plants need sunlight to complete their photosynthesis or their food-making process. In addition, it is also an essential element for their growth. Without sunlight, their chance of survival is very slim even when they are supported with water and necessary soil nutrients.
Potential huge profits and partial ownership of a corporation.
That is the two most compelling reasons why investors are on the hunt of different corporations going on public or undergoes an initial public offering of their stock. For such corporations, the primary benefit that they can derive from going into public is additional generated revenues for sustaining the growth of their business operation.
But for investors who are fond of purchasing common shares offered for sale to the public through the initial public offering process, that is another story.
Growth of their business is one thing that most investors want to happen during their tenure in the business industry. They want to see the operation of their business to grow and probably expand it to accommodate the needs of other potential clientele not just within the regional coverage but on the national or probably on the international coverage as well. Such growth in business operation alone already translates to huge revenues later on.
Supposedly you have assumed the highest post of a certain corporate organization and at that time the corporation is now planning to incorporate new products that will be sold under its brand name and expand the business operation from regional to national coverage. Since you are now the corporate head executive, you need to do something to sustain new corporate plans under your administration.
The World Wide Web is one of the greatest masterpieces created by the imaginative minds of human beings. It is a worldwide, read and write information space wherein you can find different items of information such as text documents, images, multimedia items, and others. Such items of information can be uploaded, downloaded, accessed, or cross-referenced in the simplest possible way.
And that simplest possible way is through the search engines.
Supposedly you are one of the members of the board of directors of a certain company. The board realized that there is a need for additional capital infusion since the company registers a consistent growth rate in terms of production and marketing aspects. Such growth needs to be addressed in order to avoid later problems that may even result to the mismanagement of the company and possible bankruptcy instead of a progressive corporate output.
Bulky text documents, cassette tapes, video home system (VHS) tapes, or even digital video discs (DVDs) as well as other items of information can be stored in a single webpage or a website on the World Wide Web and can be accessed with the use of a web browser.
That is the power of Internet technologythe storage as well as the access of various items of information can be done by just having an Internet-connected personal computer.
Before the popularity of Microsoft’s Internet Explorer and Mozilla Corporation’s Firefox web browser, Netscape first dominated the web browsing arena. It was formerly known as the Netscape Communications Corporation that was established in 1994. It offered an extensive line of client and integrated computer applications software for commerce and communications over the Internet and private IP or Internet protocol networks. Netscape’s most popular product during that time, which is the Netscape Navigator, became the leading web browser that allowed individual computer system units to trade information and conduct commerce over the Internet. It offered enterprise with basic capabilities for the creation and operation of web servers, sites, and other places on the Internet which browsers could visit.
“The pause that refreshes.”
“Always the Real Thing.”
Still remember who frequently uses such slogans for their advertisement over the years?
Is there anybody in this world that doesn’t know about Coca Cola?
Probably, even the settlers at the wild areas of the Safari and the rest of the African nation got the taste of this famous carbonated drink that now counts 120 years and is still counting. Even the Eskimos, “polar bears”, and “penguins” are drinking ice-cold Coca Cola despite of the extreme cold conditions on the North Pole (that is according to their television and billboard advertisements).
William Gates III.
Carlos Slim Helu.
They are just five among the 793 recorded billionaires around the world, and they have a combined net worth of around $2.6 trillion, which is 18 percent up compared to the combined net worth of 476 recorded billionaires around the world in 2005. Their average individual average net worth is around $3.3 billion.
The increasing number of billionaires is due to the excellent performance of different stock markets around the world. In fact, India’s BSE SENSEX market was up by about 54 percent in the past 12 months, thus producing 10 more new billionaires for this year, more than any other country besides the United States.
IPO, IPO, IPO.
It is a three letter acronym that has insignificant meaning to English critics (since it does not suggest any idea at all at first glance), yet a golden opportunity for investors in raising the working capital of their business. What is IPO, its attributes, and its implication to the business community (Investors have the interest to the subject; never mind the English critics)?
The year 1998 is just a common year on the Gregorian calendar aside from being the year of the Gemini or the Twins. However, there are various significant events happened during this year.
In this year of January 6 when the Lunar Prospector (a mission selected by the National Aeronautics and Space Administration for full construction and development as part of the Discovery Program and designed for low polar orbit investigation on the moon) spacecraft was launched into the Moon’s orbit, and later on found out that there are evidences of frozen water in the Moon’s poles. It was also this year of January 8 when Ramzi Yousef, the prime suspect in World Trade Center bombing was sentenced to life imprisonment. It was also the same year of February when the U.S. Senate passed Resolution 71 which urged then U.S. President Bill Clinton to take all necessary actions in response to the threat posed by Iraq’s refusal to end its WMDP (weapons of mass destruction program).
Google, the search engine giant.
Rosneft, Ireland’s state-owned oil giant.
Netscape Communications Corporation, one of the software program manufacturer giants.
Aside from the descriptive word “giant” which refers to their well-established corporate system in their respective industries, these three companies have something in common, together with other large business entities around the world.
They went public through the IPO or the initial public offering.
For individuals who are not avid fans of the issues and other whereabouts circling around the business and investment community, initial public offering does not make sense at all. However, for most corporate entities who want to pursue expansion of their operation as well as providing additional services to the public, initial public offering is an important matter for them.
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?
Successful investors are knowledgeable about the “ins and outs” of the market. Aside from understanding the basics that surrounds the world of business venture, successful investors are knowledgeable about the moral conduct and implications of their conduct towards their business venture. In other words, in order to succeed on a particular investment, an investor must swear before his colleagues that he will conduct his business in a morally-upright way and within fair competition.