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 It is the biggest cancellation of IPO this year, with over $1 billion worth of IPO withdrawn. In addition, a total of $3 billion worth of IPO have been withdrawn so far in August, making it the worst month for cancellations for 2006.

These are just some of the “past and present” events that happened within the business community with regards to initial public offering or IPO. For individuals who do not follow the latest events in the business world, IPO is nothing but a simple three-word term. However, for investors who are planning to increase the profitability of their business, IPO is an essential component for them.

What is initial public offering or IPO? In financing, the term applies to the first sale of a corporation’s common shares to the public. Its major purpose is to raise additional capital for the corporation that will be used on various purposes, especially with regards to business operation. In other words, instead of securing a business loan to finance possible business expansion, many corporations files an IPO before the Securities and Exchange Commission (SEC), which is the governing body for IPO process.

Aside from SEC, there are also underwriters which are composed of several investment banks that will offer the corporation’s common shares to interested public investors through different methods. They usually assess the value of shares to the market, and paid by commission based on the percentage of the value of the shares sold to the public. In addition, since the IPO process are also governed with heavy legal requirements, corporations under IPO hire the services of major law firms across the country to help them draft a prospectus that will contain the corporation’s background, finances, and other related information. Such prospectus will be attached to the offer for sale as mandated by the regulations governing the process.

The aforementioned procedure is common on small and not well-known companies. For larger IPO deals (which involves multinational corporations as the issuer or the one selling common shares to the public), it is typically underwritten through a syndicate which is a group of major investment banks that have established themselves in the finance industry. In most cases, the commission that underwriters earned in large IPO deals reaches up to as high as 8 or 9 percent.

All IPO deals in the United States are under the jurisdiction of the Federal Securities Act of 1993 as well as state laws related to the conduct of IPO. If the deal will be done in Europe, the European Union (EU) have unified laws relating to IPO (the Prospectus Directive of 2003) despite the absence of any central regulatory mechanism for the process.

Underwriters in European IPO deals generally have joint and several liabilities for the underwriting of all offered shares for sale. It is relatively different compared to U.S. rules, wherein the underwriters are separately responsible for the allotted portion of the offering.

That is what initial public offering or IPO is all about, regardless of the country the deal will take place.

Related posts:

1. Understanding the Initial Public Offering of Stock Lingo
2. Initial Public Offering Process: How it is Done?
3. Where is the Capital? Why don’t you Go on Initial Public Offering?

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.

In business, costs are defined as the amount of money that you need to use to acquire something. Whether you have homemade ham business or trading foreign currencies for a profit, you need to spend some amount of money to acquire or produce a particular product and later sell it on a price which will yield to profit. That is what is referred by most investors as the cost.

What are the common expenditures that every company must address? These are, but not limited to, the following:

* Production costs (includes raw materials, machine maintenance if there is any, electricity, crude oil used for machines, and others);
* Maintenance cost (includes maintenance on the facilities such as the manufacturing plant, business office, machineries, automobiles for deliveries, and others);
* Personnel cost (manufacturing plant workers, office personnel, delivery personnel, and retailers);
* Advertising (public relations, print and broadcast media advertising, Internet advertising, and others); and
* Other operation-related miscellaneous expenses.

Another cost-oriented element that a company may incur is raising additional capital to sustain growth in production or possible business expansion. One of the methods used in raising additional finances for a company, which is the IPO or the initial public offering, requires you to prepare thousand of dollars along the process just to sell the common shares that you issued to the public.

What are the actual costs that you may incur when your company will undergo the IPO process?

Initial public offering is the first sale of a company’s common shares to the public. It involves several investment banks that will serve as the underwriters for the process. The issuer or the company that will sell their common shares will enter an agreement with the lead underwriter to sell such shares to interested public investor. The underwriter, in return will offer the shares to investors who want to purchase it for a price.

Along the IPO process, you will definitely incur costs, which is dependent on the stage of the process. For instance, one of the stages within the IPO process is the completion of disclosure documents, which is vital in convincing investors with regards to the viability of your IPO. The absence of any well-defined business plan that you need to present to the investors will yield to difficulty in answering the disclosure document questions. In most cases, the business plan will run for about 25 to 100 pages, and may cost you around $5,000 to $20,000 on just a single stage alone.

If you will sum it, a typical business firm may spend as much as $750,000 worth of direct costs related to an IPO process. Take note that it does not yet include the indirect costs such as the management time spent on the IPO, the disruption of the operation while the company is under IPO, and a good team of IPO planners–consultants, underwriters, lawyers, and specialists.

It is really costly to go on IPO. So the next time you plan to sell the common shares of your company make sure that you have enough funds that will shoulder the costs related to your initial public offering process.

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1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?
3. Initial Public Stock Offering Process in 1965-Looking Back on the Past

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.

It is also the year for various significant events around the world. It was in New Year’s Day of this year when Pervez Musharaff wins the vote of confidence from the Electoral College which is composed of the various provincial assemblies and the Parliament of Pakistan, confirming his presidency and de facto dictatorship until 2007. It was also in the same year of March 2 when Democrat Senator John Kerry clinched the party’s presidential nomination for U.S. presidential election by winning 9 out of 10 primaries and caucuses. It was also in the same year of December 26 when the worst natural disaster occurred in Southeast Asia when strong earthquakes (magnitude 9.3 in the Richter scale) hits the Indian Ocean region, which generated huge tsunami waves that crash the coastal areas of India, Thailand, Sri Lanka, Myanmar, Malaysia, Burma, Bangladesh, Indonesia, and Maldives.

And 2004 is the year where it was forecasted that the 200 mark in terms of companies going public will now be broken.

The term “companies going public” is also referred to as companies undergoing an initial public offering or IPO. It is the initial or first sale of company’s common shares to the public to raise additional revenues for the company. Every year, there are hundreds of companies that files for an IPO, though some of them withdraws from the process due to several reasons, such as change in market conditions and others.

The year 2004 in IPO is considered to be “one of a kind” because it was likely to break the 200 mark in terms of companies under IPO. The initial scenario includes 164 IPOs filed for the first nine months (January to September) of 2004. The prediction was based on the trend of the previous years in terms of filing IPOs during the last quarter of the year. A review on the last 5 years revealed that 23 percent of listed IPOs have priced during the fourth quarter. Based on the given figures, IPO market analysts could see 50 more IPOs that could be listed before 2004 ends, thus making the projected number of 2004 IPO registrants at 217, making the 2004 IPO market the most active since the 2000 IPO market.

The prediction came true. At the end of 2004, there were 253 IPO registrants recorded. The total amount worth of IPO was at $46.8 billion, making it one of the impressive IPO market compared to the 1998 IPO market wherein there were 370 IPO registrants yet the total amount worth of IPO is just around $44.8 billion. In addition, the 2004 IPO market was just 76 IPO registrants away from hitting the 35-year average number of IPOs each year at 329.

The year 2004 is not just a memorable year for Pakistani President Pervez Musharaff and U.S. President George W. Bush for winning their respective presidential bids. It is also a remarkable year for the IPO market, and it is expected to carry on more IPO registrants for the years to come.

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2. Understanding the Initial Public Offering of Stock Lingo
3. Initial Public Stock Offering Process in 1965-Looking Back on the Past

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.

Initial public offering or referred to by its acronym IPO, is basically the first sale of a company’s common stocks to the public, which is why it is called “company that will go on public”. One of the major reasons why companies go on public is to raise additional capital that will be used to sustain their operational expenses. Although companies undergoing the IPO process must adhere to the heavy legal requirements imposed by the governing laws and authorities, IPO is considered to be an effective method in raising additional capital for a company.

Typically, an IPO process involves several investment banks that will act as the underwriters for the deal. The company will enter an agreement with a lead underwriter that will facilitate the public issuance of their common shares to the public. The issuer (or the company issuing the common shares) must draft a prospectus that will show the details of the company’s background, history, products, operations, industry environment, and other related factors.

Such prospectus will be submitted to the U.S. Securities and Exchange Commission (SEC) for approval. Once approved, the price of the common shares will be finalized, and the IPO will now be on the “free riding period” wherein the shares will be offered to the public in different ways.

In most cases, newly-formed and not well-known companies are the ones involved in the IPO process. However, there are large corporate organizations that go on public to further raise funds to sustain their growing business operation. One of which is the Netscape.

Netscape, or formerly known as the Netscape Communications Corporation, is an American-founded computer application company, which is best known for their Internet-browsing products and services. The Netscape browser was dominant before in terms of usage share. However, with the competition among different browsers, Netscape have lost their user base within that particular area. As a result, the usage share of Netscape browsers is now under 1 percent and still falling slowly.

Netscape went public for the first time in April 1994. They have filed before the Securities and Exchange Commission for an initial public offering of 3.5 million shares of common stocks to the public. After the completion of the IPO process, Netscape were able to grow faster than any other existing software company in terms of revenues. Their initial market value was now around $ 1 billion against the $200 or $300 million of other computer application companies. In addition, they have enough cash to pay for their additional expenditures.

Netscape existed as an independent company from 1994 up to 2003 before they became the subsidiary of the America On Line (AOL). However, the Netscape brand is still in use.

Although the Netscape is now a subsidiary of another large Internet-based company, it showed that through IPO, additional capital to pay for additional expenses and increased market value is a possibility.

Related posts:

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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 company’s 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 company’s 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.

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1. Understanding the Initial Public Offering of Stock Lingo
2. Initial Public Offering Legal Requirements?Undergoing IPO is not as Easy as you Think
3. Initial Public Stock Offering Process in 1965-Looking Back on the Past

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.

In the same manner, companies need capital or financial assets to support their day-to-day business operation. They need to pay the suppliers of the raw materials that they are using to manufacture their products. They need to pay their employees who helps the company manages its operation. Advertising and other PR stuffs also needs financial support in order to promote their products to the public.

Thus, capital for all companies serves as their “bloodlines”. Without it, no business operation, and definitely, no generated revenue for the company.

Companies can raise additional capitals that they need to support their business operation as well as possible expansions in various ways. However, one of the more popular ways to raise capital for a company is the IPO or the initial public offering. It is referred to as the first sale of a company’s common shares to interested public investors. As previously mentioned, it is primarily used to raise additional capital for the company. Keep in mind that this term only refers to the first public issuance of a company’s common stocks. Any later issuance of common shares to interested public investors is now referred to as a secondary market offering.

Initial public offering of common stocks has proven to be an effective way of raising additional capital for a company, though there are legal compliances and reporting requirements that must be met. The United States is considered to be imposing heavy legal requirements to those companies that will file an IPO for additional capital generation. Under the Federal Law, all IPO process are governed by the Securities Act of 1993 and laws of the U.S. Securities and Exchange Commission, with each stock exchange has its separate respective rules that every company must follow.

The IPO process generally includes one or more investment banks (financial entities that assist both public and private companies or corporations in raising capital as well as provide strategic advisory services for acquisitions, mergers, and other kinds of financial transactions) as the underwriters. The company will enter a contract with the underwriter to facilitate the issuance of the stocks to the public. The underwriters will be the one to approach investors who are interested in buying those common stocks.

During the early years of the IPO, it is considered to produce a positive mean initial return to the listing companies. In 1965 when the IPO process is still on its first years of operation, there are around 120 companies listed which generates an average initial return of 11.4 percent from the issuance date to the end of the offering month.

IPO analysts recorded an average of 22 percent worth of initial returns on the listed companies from 1965 to 2004. It clearly shows that many investors are interested on purchasing shares through the IPO process. It also illustrates that companies under IPO listing generally provides an additional capital for them.

The initial public offering of common stock during the 1965 era is just a manifestation that the IPO process, despite of the heavy legal requirements that must be made, it is still the most ideal way to issue stocks to the public and raise additional capital for a company’s day-to-day business operation.

Related posts:

1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Initial Public Offering Legal Requirements?Undergoing IPO is not as Easy as you Think
3. Understanding the Initial Public Offering of Stock Lingo

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.

Eventually, if they will purchase several shares of a corporation through the IPO, they will now be one of the major stakeholders of that corporation, thus giving them the privilege of partial ownership of such corporation. In other words, investors who purchased common shares will have the opportunity to take part on the decision-making with regards to important matters concerning the corporation’s marketability in the industry where it belongs. Aside from such privilege, they can also share whatever revenues the corporation will generate.

Therefore, partial ownership together with the privilege of sharing with the corporation’s revenues motivates different investors to hunt for companies or corporations undergoing the initial public offering process.

If you are one of investors who looked into the promise of additional power within the business community through the partial ownership privilege of a corporation going into public, it is important that you are aware of the best resources for IPO information, especially if you are within the Canadian market. If that would be the case, why don’t you check such Canada IPO information online and position yourself on the positive side?

There are websites that offers free information about various companies in Canada that goes on public on a particular month. Such websites refine their database of IPO companies in a monthly basis. They have included web-based search engines which could be of great help to the investors in their quest of companies or corporations around Canada who offer their common shares for sale.

How will you do your search for Canadian IPO companies? The search is done by filling up the required information about details you are looking for, such as the following:

* The company’s date of filing (whether in descending or ascending order);
* The company’s name;
* The Canadian exchange where the company is listed (whether is Toronto Stock Exchange or TSX Venture Exchange, for instance);
* The Canadian province where it was based;
* The industry where it belongs;
* The underwriter assigned for the IPO process of the company;
* The underwriter’s business office location; and
* The offering size of the company’s common shares;

Aside from searching for different companies or corporations in Canada, you will be able to find also the featured and recently-listed companies under IPO for that month. It shows the featured company’s IPO made to Canada equity markets and other financial data that you need in your personal analysis. Such details are readily available over the Internet.

Both offering of common shares and its purchase by interested public investors in Canada through the initial public offering process is now within convenience, thanks to the World Wide Web. You need not speculate anymore–the information is already verified, and you can now start venturing into Canadian companies under initial public offering.

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1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Initial Public Offering of Shares to 20,000 Investors?Looking at IPO the “Real Way”
3. 1998 Initial Public Offering: Noted to be an IPOmania for Internet-based Companies

However, along with the sweet fruits of the growth of your operation, expect that you will incur additional expenditures resulting from such operation growth. You need to finance additional personnel who will handle the expanded operation as well as additional raw materials from your suppliers. In other words, once the growth is seen within the business operation, there is a need for you to sustain such growth by assuring that all additional expenditures will be met along the way.

Thus, you need additional funding to sustain your growing company. Additional capital must be raised to finance the expansion of business operation.

What will you do? Ask your financial advisers or even market experts, and they will just spell three significant words to you.

INITIAL PUBLIC OFFERING.

Also known as IPO, initial public offering is referred to as the first sale or issuance of a company’s common shares to the interested investors. Its main purpose is to raise additional capital or finances for the company through the distribution of their common shares to investors who want to purchase it. Take note that the term only applies to the first sale or issuance of a company’s common shares to the public. Any later issuance of shares will now be referred to as a secondary market offering.

IPO is considered to be an effective method of raising capital for a company. However, take note that the laws of a particular country where the IPO process will take place impose heavy legal requirements and compliances that every company going on public must met. In other words, undergoing an IPO process is not as easy as you think. You must be knowledgeable about the rules and regulations that you must comply with regarding IPO.

In the United States, the initial public offering is governed by the Federal Securities Act of 1993, together with the rules and regulation of the U.S. Securities and Exchange Commission. In addition, each exchange has their respective and separate rules that any company that will go on public must comply. For small companies that will undergo the IPO process, it may be affected by a certain state’s blue sky laws, though such laws may pre-empted by federal laws especially when the common shares are listed on major exchanges.

Before the IPO process jumps off, the issuer (the company that will sell its common shares to the public) must outline a prospectus. It will contain the overview of the company’s history, corporate background, products, operations, risk factors, and other essential information. The Securities and Exchange Commission will actively review the content of the prospectus and major law firms are involved in the drafting process.

Once the SEC approved the prospectus, the market value of the common shares will now be finalized and the IPO are now in the “free riding” stage wherein the shares will now be offered for sale on different methods, such as road shows, telephone calls, and institutional visits. All the offers must be accompanied by a copy of the prospectus.

The legal requirements are really heavy if your company will go on IPO. However, once such legal requirements have been complied with, expect that additional capital that you will use to sustain the growth of your business’ operation is within your reach.

Related posts:

1. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?
2. Initial Public Offering of Shares to 20,000 Investors?Looking at IPO the “Real Way”
3. Beware of Possible Initial Public Offering Scandal and Protect your Investing Career

The board of directors suggested two possible options to sustain new corporate plans. Since the corporation now generates profit due to successful business growth, you can use such profit to secure a corporate loan. The funds incorporated in the loan will be used in sustaining the plans for inclusion of additional products that will be offered to the public and possible expansion of your business operation. The corporation has the sufficient assets that can be used as a collateral or guarantee in case the loan will falter later on.

The next option that the board suggest may is the corporation going public, or to undergo the IPO or the initial public offering process. It refers to the first sale of the corporation’s common shares to interested public investors. The revenues that will be generated through IPO can be used to sustain new corporate plans without losing the essential assets of the corporation.

As the head executive, which of the two options will you choose? Are you willing to sacrifice the corporation’s asset by making it as the collateral for the loan? Although it will be a good idea (especially if the corporation follows the limited liability concept) to secure a corporate loan, it is not a good idea to lose the assets that the corporation have. Add to it the inconvenience of high interest rate applied to monthly repayments which can affect the performance of the corporation in terms of profit generation.

On the other hand, if you will choose to go on public, the chances of selling all your common shares is high because the process itself guarantees that the underwriters involved can attract potential investors. Though it may cost you more, the generated revenue will be guaranteed and the assets of the corporation will be protected as well.

Let us again put you in a situation wherein your corporation offers 15 percent off the prices of the common shares under IPO to about 20,000 investors and they are limited to receive 100 shares, what will happen? Will such price slash on the common share create damage to the corporation itself?

Before getting into IPO, you must be first knowledgeable of the laws that govern the process. Under the Federal Securities Act of 1993, a company or corporate entity with around 20,000 investors cannot have an IPO. Keep in mind that it is an initial public offering, but if a company has more than 300 investors, the issuance of common shares must be done in public, therefore it will not fall under the “initial” category anymore.

Another thing is that the number of shares being purchased or sold is completely irrelevant. For instance, a share of a certain company falls at about $90,000 yet the value of a share of many “stocks” trade is at $0.01. Thus, the value of 2 million shares will depend on several factors like if there are a total of 2,000,000 or 200,000,000 shares issued.

Whether 20 investors or 200 shares or even 200 million shares, understanding the laws governing IPO will help you see the process in the “real way”.

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2. Where is the Capital? Why don’t you Go on Initial Public Offering?
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And that simplest possible way is through the search engines.

Also known as search service, search engine refers to a specific program developed to help search various information stored on a computer system or resources such as the World Wide Web. It allows anybody to ask for any content meeting specified criteria (usually those containing a specific word or phrase), and the search engine will return a list of references that matches those criteria specified in the search. Search engines employ consistently-updated indexes in order to operate efficiently and display related results.

Search engines can be used on different environments (such as enterprise search engines that makes search on intranets or personal search engineers that involves search on individual personal computers). However, its most common applications is within the walls of the World Wide Web, the purpose of which is to retrieve different pieces of information stored on the web.

The convenience that resulted to the popularity of Web search engines among Internet users paved the way for the rise of different search engine, one of which is the Google Inc. which launched its first search engine results in 1998. The success for Google followed in 2001 which was based on the concept of PageRank (patented method of assigning numerical weight in each element of hyperlinked set of documents to measure its relative importance within the given set) and link popularity. The larger the number of websites and linked webpage, the more refined the result will be when a search will be done.

Until now, Google search engine still leads in terms of finding information over the World Wide Web. To accommodate large number of searches and probably add several new features to their search services, Google announced that it will go on public in April 30, 2004.

The statement “Google will go on public” refers to their filing of initial public offering before the Securities and Exchange Commission. Initial public offering or also known as IPO is the initial sale of a corporation’s common shares to the public.

In other words, Google filed the first issuance of their common shares to interested public investors (any later issuance of common shares to the public will now be referred to as a secondary market offering) in the hope to raise additional capital for the corporation. Google expects that they will be able to raise as much as $2.7 billion from the offering, which will take the format of an online auction to make their common shares widely available to the public.

The IPO process involves several investment banks as the underwriters who offer the common shares for sale to the public. In the case of Google, the lead underwriters for their deal were the Morgan Stanley and Credit Suisse First Boston.

Many investors have seen the IPO filing from Google as “another event that will lead to another technological boom period” because of additional features that Google may include in their services. But the bottom line here. Google went public because they have seen its profitability at the end of the deal.

And Google have that market worth of around $24 billion after their initial public offering process.

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2. Where is the Capital? Why don’t you Go on Initial Public Offering?
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There are various suggestions raised by your colleagues. Some suggest that since the company has enough funds, it could be used to finance a business loan that will be used to sustain the company’s growth. Others suggest that the company must go public in order to attract several investors who will infuse the needed capital for the growing operation of the company.

As a member of the board of directors, which way will you pursue? Remember that there are two options that the company can takefirst is entering into a loan agreement wherein you need to present any corporate assets as security to the loan. Second, the company could be listed into an IPO or initial public offering, determine the number of shares that the company wants to sell to the public, and the rest will just follow. Both options can raise revenues, yet the question will not just be about generating additional revenues at all.

The question will now be like this: “Which of them provides an advantage to the company and its stakeholders?”

Let us scrutinize the options carefully by going through the first option. The process is simple: once the company found a lending institution that will agree to lend the company with the needed amount, the company through its high executives and officials will enter a contract with a lending company and make an agreement on the conditions prior to the approval of the loan. It will include securing any company assets with equivalent value of the loan against the company and monthly repayments within a specified period of time with applied interest.

The second option will involve the initial sale of the company’s common shares to the public. The company will undergo the IPO process under its governing laws, particularly the Federal Securities Act of 1993 and the governing bodies (such as the Securities and Exchange Commission and the exchange where the common shares of the company are currently listed). Typically, you will spend more or less than $1 million in the whole process, but the initial return of investment is higher than your expenses, since the underwriters (composed of several investment banks) will sell the shares to interested investors higher than its market value.

If you will compare the two options, definitely the initial cost is higher when the company undergoes IPO. The return of investment has yet to be seen after the completion of the process. In other words, you will be spending first before you earned the revenues that you need. It is contrast with securing a loan since you will be able to get the borrowed capital even before you make any repayments. You will be able to use the funds immediately after the released of the approved loan money.

However, the loan will now be on the “negative” side once you will make repayments to the loan that you availed. Remember that once you failed or faltered on the conditions agreed on the loan, the collateral, which is your company’s assets, will be automatically taken away by the lender. In IPO, the assets will not be at risk. Instead, such assets will increase because of additional capital raised through IPO.

The choice between an IPO and a business loan is up to you. Scrutinize the given options and make the right choice.

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1. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?
2. Netscape’s Initial Public Offering History: Spirit of a Successful Business Entity
3. Google Initial Public Stock Offering: Raising an Additional $2.7 Billion and Intensifying Search Business Competition

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.

You don’t need to carry VHS tapes or DVDs to watch your favorite movies over your friend’s home theater system. Just upload it on a webpage and you can access it directly to your friend’s computer system especially if it is hooked on the Internet.

In the same manner, you can listen to your favorite music without the need for several audio compact discs (CDs) or cassette tapes and a music player. All you need is a compatible multimedia speaker connected to your personal computer system and you can download different audio files and play it directly to your built-in audio/video media player.

Probably you are familiar with the respective functions of your personal computer system. If your PC unit is hooked on the Internet, you frequently used a computer software application that you used to have an access over different items of information which is called the web browser. In computer system application, it refers to a software application that enables you to display and interact with images, text documents, audio and video files, and other pieces of information stored on a webpage or a website within the World Wide Web or even in the LAN or the local area network.

In other words, your web browser allows you to access information provided by different webpage within many websites through hyperlinks.

There are different web browsers available for your PC unit, some of which are Internet Explorer (Microsoft) and the Mozilla Firefox (Mozilla Corporation). Of course, who would ever forget the first web browsers during the early years of the World Wide Web in computer system application, which is the Netscape?

Netscape is the web browser owned and developed by the former Netscape Communications Corporation, which was dominant before with regards to usage share (the percentage of web visitors to a group of websites that uses a particular browser). However, because of the browser wars, Netscape lost much of their user base in terms of usage share area. It leads to the existence of the company within the span of 9 years (from 1994 to 2003) and later on became the subsidiary of the America On Line (AOL).

The glorious years of Netscape started when it completed its initial public offering on April 1994, barely 16 months after the company’s founding. The first issuance of their common shares to the public became the most remarkable step that they have made within the first few months of the company’s operation. Because of the IPO, they grew faster than any other software company in the history. Their initial market value rose to $1 billion as against any other software companies whose market value were just around $200 million to $300 million. In addition, they had enough cash to compensate most of their expenses.

In other words, Netscape’s first initial public offering helped them in another way to became one of the successful software companies during the 20th century.

Related posts:

1. Netscape’s Initial Public Offering History: Spirit of a Successful Business Entity
2. Interesting Initial Public Offering of The Coca Cola Company and its Worldwide Affiliate Units
3. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?

The development of the Internet technology in the late 1960’s facilitated the demand for Netscape’s products. The late 1960’s is the period wherein the computer system units needed a software that can access the information stored on the Internet as well as share and upload data that can also be accessed by other web users. The Web was extensively engineered during the early 1990’s with the inclusion of Hypertext Markup Language (HTML) and Hypertext Transfer Protocol (HTTP).

It facilitated the entrance of Netscape in the Internet market through the web browsers area, where they were faced with two challenges: first is to set a new industry standard and second, to generate revenues out of that new industry standard. In order to face the challenge, Netscape created a computer program that will eliminate Mosaic (software program created by a group of computer science students working for NCSA or the National Center for Supercomputing Applications which enabled non-technical users to gain access and retrieve data on the Web) out of the market.

And Netscape did it. Sixty percent of Mosaic’s share in the web browsing industry was thrown out by Netscape’s Navigator.

However, different young and rapidly-growing software companies became Netscape’s biggest competitors in the web browser market. They need to have an additional equity capital to sustain the intense competition between other software companies. To raise additional equity capital, Netscape have gone to the process of initial public offering of their common shares to interested investors.

To address Netscape’s needs for an additional equity capital, they began to explore the option of raising additional funds through IPO or initial public offering in the early months of 1995. Since they have undergone IPO, Netscape was injected with different forms of investment capital. Different investors ventured into the industry of Netscape, hoping that with the popularity of the company among web browser clientele, they will be able to generate huge profits.

Netscape completed their IPO in April 1994, and was considered to be a remarkable step in its entire corporate history. Netscape became the fastest growing software company in the history of the web browser market, with an initial market value of around $1 billion against several hundred millions of young software companies in the market.

IPO brought about $9.5 million worth of investment capital to Netscape. At the end of the year, the net revenues were recorded to be at $696,000 and net loss of around $8 million due to cash flow from operating activities. However, Netscape, through the IPO, had enough financial funds to pay most of their expenditures.

Netscape’s initial public offering history is remarkable. Although the corporation does not exist anymore, Netscape’s performance during the entire 9 years of their operation in the web browser market is truly a spirit of a successful business entity.

Related posts:

1. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?
2. Google Initial Public Stock Offering: Raising an Additional $2.7 Billion and Intensifying Search Business Competition
3. Where is the Capital? Why don’t you Go on Initial Public Offering?

“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).

Coca Cola, or commonly know in different tongues as “Coke”, is the most famous and popular carbonated drink around the world. The Coca Cola Company (the corporate organization behind the manufacturing and distribution of Coca Cola drinks around the world and has its main headquarters situated in Atlanta, Georgia) was founded by Asa Candler. His legacy was continued by his successors and eventually made Coca Cola drinks as a major carbonated drink in the United States and later around the world.

Through the years, The Coca Cola Company introduced varieties of their soft drink products under the Coca Cola brand name. There you have the low-calorie Diet Coke and the sweet and delicious Cherry Coke. It had gone different issues, such as the secret formula of Coke drink production (which allegedly contained trace amounts of cocaine, which was removed when health regulations were tightened in 1902), various negative effects of Coca Cola drinks to the body, and commercial rivalry with other carbonated drink manufacturer such as Pepsi.

Nevertheless, Coca Cola had gone through different issues yet they stand still and prove to be one of the longest-running and well-established carbonated drink manufacturers and distributors not only in the United States but also around the world.

However, there is one thing that we have missed throughout the course of Coca Cola history. And that is, they have also undergone the initial public offering just like any other major and multinational companies around the world.

Initial public offering involves the first or initial sale of the corporation’s common shares to the public in the hope of raising additional revenues for the corporation. If you will apply in on the case of Coca Cola, the worldwide manufacturing and distribution of their carbonated drink products is the result of their IPO, which happened in 1919. A single share of Coca Cola is worth $40 dollars, yet the market value of their shares suddenly crashed to $19 per common share in 1920 (when they have undergone a secondary market offering).

Despite of such crash in the market value of their common shares, Coca Cola managed to survive and extend operations to different regions around the world, particularly within the Asian and European regions. Different corporate entities later on affiliated with Coca Cola to further boost their revenue generation capabilities. However, just like their mother company, different Coca Cola affiliate companies have also undergone IPO, one of which is the Coca Cola Icecek, the affiliate company of Coca Cola in Turkey.

Coca Cola Icecek, which had a 59% share of the local carbonated drinks market in Turkey in 1993 and has an average annual turnover of one billion lira ($740 million), had plans of going into the public. In fact, they have asked permission from the Capital Markets Board (the central regulatory agency for IPO) for an IPO worth 20.16 percent of their total company shares. According to Tuncay Ozilhan, the chairman of the Turkish Coca Cola unit, they hoped for a “green light signal” from the Board at the end of May or start of June 2006 to launch their IPO, which was postponed for several times already. In 2004, Anadolu Efes, the owner of the 45.6 percent share of Coca Cola Icecek, had appointed Credit Suisse First Boston to revive the IPO, yet it was postponed twice.

Whatever happens to the IPO filed by its affiliate companies around the world, Coca Cola will always be the soft drink we want to stay in our refrigerators.

Related posts:

1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Google Initial Public Stock Offering: Raising an Additional $2.7 Billion and Intensifying Search Business Competition
3. 1998 Initial Public Offering: Noted to be an IPOmania for Internet-based Companies

Warren Buffet.

Carlos Slim Helu.

Ingvar Kamprad.

Lakshmi Mittal.

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.

Russia’s RTS Stock Exchange also made an enormous performance, posing an impressive 108% increase in circulating capital. Such surge of wealth in the Russian stock market is due to the strong gains in commodities prices. The former member of the dissolved Soviet Union produced 33 billionaires, with 7 of them that are new in the list.

As mentioned earlier, the increasing number of billionaires every year (from 476 to 793) is attributed to the excellent performance of different exchanges around the world. Many market players are throwing their investments to the arena in the hope of huge profits at the end of each deal. Thus, the money is flowing around the market, and every investor has the opportunity to partake of the billions of dollars worth of circulating capital around the market.

Speaking of capital, every investor is very particular about the initial funds that they will use for their investment venture. In finance, it generally refers to the financial wealth that is used in starting or maintaining a certain investment. In other words, capital is very important for every deal that you will make that needs finances.

If you want to form a company, definitely there is a need for you to raise a huge amount of capital in order to finance its daily operations. There are various ways that you can use to raise capital, and one of which is the initial public offering.

An initial public offering (IPO) is the first sale of a company’s common share to interested public investors. It is an effective method in raising capital for a company, though there are legal compliances and reporting requirements that must be met. Take note that initial public offering is only applicable to the first issuance of common shares to the public. Later issuance of such shares will now be referred to as secondary market offering and involves a different set of requirements that must be met.

There are various large corporations that make use of initial public offering method, and one of which is Google, one of the major search engines over the World Wide Web.

Google filed the initial public stock offering with the U.S. Securities and Exchange Commission in the hope of raising as much as $2.7 billion that will be used in the expansion and development of their Internet-based services to the public. The conduct of their initial public stock offering involves an unusual format of an online auction to make their shares widely available to the public. Credit Suisse First Boston and Morgan Stanley were named as the lead underwriters for that particular initial public stock offering.

Aside from the raising of capital for the company, Google was hoping to increase the search business competition over the Internet once they file their initial public stock offering. According to different online market analyst, the competition between Google and other major search engines such as Yahoo, MSN, and Amazon will certainly intensify since they want to get their share within the search business.

So the next time you used Google and found out that they have additional services to offer, probably that is now the products of their initial public stock offering.

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1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Understanding the Initial Public Offering of Stock Lingo
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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)?

IPO is commonly known within the walls of the business community as “initial public offering”. At first glance, you will not have any idea of what it means, and what it is for. The English critics are right: IPO or even initial public offering does not suggest anything of importance to the English grammar. However, we are not talking about grammar here. We are talking about BUSINESS and CAPITAL.

Initial public offering refers to the initial sale of a company’s common stocks to the public. When you say “initial sale”, it is the first sale of the common stocks. Therefore, any later sale of common stocks after the IPO process will now be referred to as a secondary market offering. So the next time you will be able to meet a company that offers you a secondary market offering on their common stocks, you can presume that company already undergone an initial public offering of their common stocks.

What are the attributes of IPO? Let us take a look on the lingo that is used when company goes public:

* Underwriters- these individuals or groups does not “write under the paper’ or any literal meaning. In IPO, it refers to a group of investment banks that will offer the common stocks for sale on interested investors.
* Syndicate- definitely, there are no criminals involved in the process. Syndicate here refers to a group of major investment banks that underwrite the IPO of multinational companies. In other words, “syndicate” and “underwriters” refers to the same group of investment banks. The only difference is the former underwrites large IPOs while the latter underwrites small and medium-sized IPOs.
* Securities Act of 1993- this Act serves as the governing rules and regulation of IPO process. It is also known as the “Truth in Securities Act” which has two primary objectives: (1) the investors must receive financial and other essential information concerning securities being offered for sale to the public, and (2) rule out deceit, misinterpretations, and other forms of fraud in the public sale of such securities.
* Prospectus- it contains the overview of the company’s history, finances, industry background, and other related information. The U.S. Securities and Exchange Commission (SEC) is tasked to scrutinize every IPO prospectus that will be attached on every offer of common stock for sale.
* Gun-Jumping- no Beretta jumps around the process. It refers to the prohibition applied to the issuer (the company that sells common stocks) and underwriters regarding any kind of public offering.
* Free Riding- it refers to the stocks offered to the public for sale through various ways. This is the period where the underwriters will now be on function.

Understanding the initial public offering lingo will definitely help you appreciate it. So the next time you will come across the term IPO, you already know what it is and you will be able to understand news concerning the IPO process.

Remember, this is not a grammar subject. It is all the subject of BUSINESS and CAPITAL.

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1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Beware of Possible Initial Public Offering Scandal and Protect your Investing Career
3. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?

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).

And who would ever forget the discovery of the White House scandal wherein then U.S. President Bill Clinton have discreet relationship with former White House intern Monica Lewinsky that has captured the attention of the international community? The year 1998 is full of events that everybody would not forget.

And it is also the year when various Internet companies go IPOmania!

The Internet technology had its growth in 1998, both in terms of usage and sophistication of the features it offered to the public. It brought out promises to the general public that it would change the way they lived. In the same manner, it also brought a promise to the business community that it would change the way investors would conduct business and could generate huge profits.

And it became true. Google, Inc., which is the largest search engine company on the Internet, launched its first search services in 1998. It is also the same year when online auctioneer eBay went public in September 1998.

Initial public offering (IPO) in 1998 was noted to be one of the most remarkable performances of the IPO market. According to the statistics of the U.S. Securities and Exchange Commission (SEC), there are about 370 IPO registrants in this year and it generated total revenues of $44.8 billion, making it one of the remarkable years in the IPO market. Out of this number of IPO registrants, 25 are Internet-based companies. Some of them are as follows:

* 24/7 Media- when it went public in August 14, 1998, its initial IPO price is $14 per common share. After its closing, per common share’s value increased to $25.88 or a change of 84.82 percent.
* Broadcast.com- when it went public on July 17, 1998, its initial IPO price is $18 per common share. After its closing, per common share’s value increased to $71 or a change of 294.44 percent.
* Broadcom- when it went public in April 17, 1998, its initial IPO price is $24 per common share. After its closing, per common share’s value increased to $112 or a change of 366.67 percent.
* eBay- when it went public in September 24, 1998, its initial IPO price is $18 per common share. After its closing, per common share’s value increased to $252.25 or a change of 1,301.39 percent.
* Geocities- when it went public in August 11, 1998, its initial IPO price is $17 per common share. After its closing, per common share’s value increased to $37.88 or a change of 122.79 percent.

What else can you say? The year 1998 is noted to be an IPOmania for Internet-based companies. Huge revenues and successful business operation– that is how initial public offering works for a company.

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1. Where is the Capital? Why don’t you Go on Initial Public Offering?
2. Initial Public Offering of Shares?Is it the Best Option for your Corporate Organization?
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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.

In finance, IPO or the initial public offering is the first issuance of a company’s common shares to interested public investors. The term “common shares” generally refers to the stocks that are consistently purchased and sold in the market. Take note that common shares are only a percentage of the total shares of a certain company or corporation, thus the majority of its shares are still within the owner/s of such company or corporation and will not be a subject for distribution to the public.

The principal purpose of a company to “go public” (another term for undergoing the IPO process) is to raise capital for the company or corporation. In other words, IPO is one of possible ways where a company or a corporation can raise capital which can be used either for additional support to its day-to-day operation or for business expansion purposes. However, any companies or corporations that will undergo the IPO process are obliged to follow heavy legal compliances and other necessary requirements.

The procedure works just like of a regular auction process. It generally involves several investment banks that will serve as the underwriters for the process. In finance, underwriters are the ones assessing the background of the companies involved in the process preceding the issuance and distribution of common shares to the public. The company or corporation that decided to go on public (or the issuer) will enter an agreement with a lead underwriter to sell the common shares to the public. The underwriter meanwhile approaches various investors who are interested in purchasing any common shares for sale.

In case of large IPO process (which involves large corporate organizations), it is typically underwritten by a syndicate (a group of investment banks dealing with a single company) that is led by a major investment bank which is the lead underwriter. Once the common shares have been distributed to the investors, the underwriters are paid through commissions that are based on the percentage of the value of the common shares they sold. In most cases, the lead underwriters take out the highest commission, with around 8 percent.

For multinational companies that will undergo initial public offering, the process may involve two or three syndicates to deal with various legal requirements in its home country and other countries as well. In addition, because of the heavy legal compliances that must be met, IPO process usually involves two or more law firms that have major practices on securities law.

Initial public offering is important for every corporate organization operating around different markets. Despite of the heavy legal requirements, it is still the best way to raise capital for any company or corporation.

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2. Beware of Possible Initial Public Offering Scandal and Protect your Investing Career
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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?

IPO or initial public offering is the first or initial sale of a company’s common shares to the public, which is why it is also referred to “going public”. The most convincing reason why many companies are going public is because it is the most convenient and probably the safest way to raise capital that will be used to sustain operational expenditures.

However, there are still some “strings attached” to this process. Though it’s other reasons such as easy access to much needed capital, increased employee compensation and liquidity due to additional funding, prestige, and publicity are compelling, there are still pointers that you must consider when deciding if initial public offering is the right option of for you to take.

Remember what happened to Netscape when it went public in April 1994? They became the prestigious computer application company that rose above its competitor, with its actual market value reaching $1 billion. However, the executives lost control of the company and even the company itself, which resulted to the selling of the company’s interest to America On Line (AOL). Many investors think that they can capitalize from the revenues generated through IPO, and yet what happened is that the company itself suffered.

Before getting into an IPO process, make sure that your company is “sexy enough” for investors. In other words, your marketing ideas (the industry and the products or services that you offer to the public) are extremely popular to the consumer, which makes it very appealing to the investors. That is why IPO is not ideal for starting and not-well known companies because the risk of losing any infused investment due to unpopularity of its marketing ideas is present. Better assess your marketing ideas first before jumping into IPO.

Do you really understand why you are going into public? You must look the revenues that will be generated on IPO as an “emergency fund” and not as a “luxurious fund”. If the company’s present financial bucket could still sustain the growth of the company and the presence of an explosive growth needs to be seen, there is no reason to go in public. It will just create little benefits to the executives as well as to the future shareholders.

Do you have the necessary funds that you will spend when going public? Keep in mind that there are corresponding expenditures in each stage along the process. For instance, you must have a well-established business plan in order to answer the disclosure document questions, which is an essential part in convincing investors with regards to the viability of your IPO. Creating a well-established business plan alone will cost you as much as $20,000.

Is the initial public offering the best option that you can choose? It requires careful assessment and evaluation of various factors. Do not be attracted by fame and publicityit can easily kill you.

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1. Beware of Possible Initial Public Offering Scandal and Protect your Investing Career

Let us take a look on the first characteristic of a successful investor. As mentioned earlier, he must be knowledgeable about the basics of business venture. He knows what are the things he needs to do before getting into business (business plan, appropriate strategies, advertising and public relation plans, and others) and how he will act appropriately on certain circumstances (such as shortage in production, increased business risk due to debt, and bankruptcy).

Supposedly you are in the situation wherein you need additional finances to sustain the increasing growth of your business operation. Where will you get such finances? Definitely, it is not ideal to borrow additional capital through lending institutions. The profit that you can generate from expanding your business operation will just be used to pay your creditors. Instead of profit, you will end up break-even (no loss, no gain). The efforts you have given are just wasted.

So how will you act appropriately on such circumstances? A successful investor will instead resort to going public, or what you called in the finance industry as “initial public offering”.

Initial public offering or IPO refers to the first sale of a company’s common shares to the public. Its principal purpose is to raise additional capital that will be used to sustain the growing expenditures of a particular company. It typically involves several investment banks that will act as the underwriters for the whole process. The company as the issuer will draft a prospectus containing all the necessary information about the company itself (background, history, financial status, and others) and will be submitted to the Securities and Exchange Commission for approval.

Once approved and the prices of the common shares are now finalized, such shares will undergo the free riding period wherein it will now be offered for sale to the public through various ways such as institutional visits and others.

Let us take a look on the second characteristic of a successful investor and then relate it to the conduct of the IPO process. If you think that scandal is just within the premises of the White House or within the legislative halls of the United States Congress, you are quite mistaken, for scandals also happens within the IPO process.

Nowadays, going public is no longer an automatic decision because of the scandals that have changed the landscape for IPO. Most of the personalities involved in such scandals turned out to be the losers now because of their immoral acts just to generate more profit out of the IPO process.

Want to know some of the corporate scandals that happened in IPO process? Take a look on the following:

* When AOL Time Warner went public in July 2002, the free riding period during the IPO process faltered, resulted to barter deals just to compensate the losses incurred, which is against the finalized price arrangements of their common shares.

* When Enron went public in October 2001, several corporate officials used illegal methods of acquiring wealth out of the IPO process by improper usage of off-the-books partnerships, bribed foreign government officials and representatives to win international contracts, and manipulated Texas and California energy markets. It resulted to the court conviction of their former corporate executives.

These are just two of several initial public offering scandals that happened during the recent years. Now, do you want to be a successful investor? If you want, then use the scandals happened as a moral lesson and do not commit the same mistakes or it will be the end of your investing career.

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