Posts Tagged ‘IPO’

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A Look At The Public Offering Process

Thursday, June 23rd, 2011

Public offering, as the words suggest, is an open solicitation to the public for the purchase of securities and other financial instruments. The most common types of instruments are equity and debt. These securities provide the investor with some type of interest, ownership, or expected return on their investment. These instruments are usually underwritten by a registered broker dealer that is entrusted to conduct the transaction.

The public or open offering can be made in a number of ways. For oversubscribed deals, preference is typically given to larger institutions who would be considered sophisticated investors and who are also likely to be long term investors. There is always an allocation, typically much smaller, for the retail or individual investor. The amount that is allocated for retail versus institutions can vary from offering to offering.

Dealer driven underwritings have come under some scrutiny of late. This is due to the pricing of the deal that is set by the underwriters. As an example, if a company required a hundred million dollars to expand their operations, they could float a million shares at a price of one hundred. This would be set by the underwriters after they conduct their analysis of what would be considered a fair value and that would also raise the required funds. If investor appetite is greater in the after market and are willing to pay a higher price, one could argue that the initial sale price was set too low.

Post issuance trading activity is vital in determining the success of an underwriting. Often times, investors want to see the value of their company increase. However, if the secondary market demonstrates a significantly higher result, say a 50% plus increase, then clearly the initial price that was set was too low. This means the company could have raised more capital if the price had been set higher. The role of the underwriter is to insure that the issuer receives a fair price, which does not always equate to the highest.

As a result, some issuing entities have opted for what is called a dutch auction. The goal here is to directly have the investors bid on the amount they are willing to pay for a specific amount of stock. The issuer then selects the price that provides the company with the appropriate amount of funds. The price at which that amount is raised becomes the clearing price which everyone pays for the securities.

As the issuer has control over this process, it can feel assured that it was able to raise the optimal amount of capital. However, unlike a dealer assisted transaction, the intent of the investor, whether they are in it for a long term investment or short term gain becomes difficult to gauge. This uncertainty regarding the quality of the investor can become an issue down the road.

Having completed the transaction, the company issuing the securities has added responsibilities. They would be required to provide periodic updates on their performance and financial condition. Depending on how well the processes are in place, this can expose the company to potential legal problems. Having the proper procedures in place can be burdensome to some smaller organizations. Additionally, management now has added responsibilities to a larger constituency.

The purpose behind a public offering is generally to expand the business operations. This type of transaction supplies the company with vital capital and also represents a branding event. As most business media look at such transactions as an indicator of investor sentiment, their coverage gives the added benefit of free publicity. A public issuance legitimizes a company in the eye of the financial markets. Aside from expanding operations, some issuers utilize such a transaction in order to divest their investments. Whether its for expansionary purposes or as an exit strategy, a public offering represents a decisive turning point in the life span of a corporation.

Check out our article to learn more about the public offering process. You can also find details about benefits of investing in IPO’s at BusinessWire right now!

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How To Perform An IPO Valuation

Friday, March 5th, 2010

Are you on the lookout for rewarding areas of the stock market to invest your capital into? If you are searching for the most profitable portions of the marketplace, look into IPO investments. Before you can invest into IPOs though, you should definitely use an IPO valuation so you can know that you are looking at an investment that is worth your consideration.

Performing an evaluation before you purchase an IPO is essential if you desire to obtain a great deal on the investments you make. An evaluation is basically the most important action you will take while you are creating your investment strategies. There are many different factors you can look into while you are evaluating a company as well.

An essential piece of data you must look into as you are evaluating a company is the amount of debt and the value of any assets the business may maintain on its records. As you are checking the financial data relating to the company you are interested in, you should add up the total value of the assets the company owns and compare that total value to the size of the debt the business owes.

In an optimal situation, you will find companies that are selling below the difference of this equation. If you discover a company selling for less than the value of its assets, you are looking at a good investment, because you are purchasing a dollar for $. 50 in this case.

There are many other factors you should look into if you wish to make a great investment for your IPO purchase. A very important factor you can look into when you are analyzing a stock is the value of the income the business is pulling in. The most important stat inherent in the financial statements of a company is the amount of revenue the company is bringing in each month and each year. This number should always be larger than the total operating expenses of the company you are interested in. If the value of the revenue is larger than the operating expenses, you are looking at a profitable business venture.

Another factor you should look into when you are evaluating an IPO is the type of business the IPO is representing. When you are investing, make sure you are purchasing a company that you can stand behind. The easiest way to stand behind a company is by deciding whether or not you would purchase the products the company sells personally. If you would personally purchase the products the company sells, you are looking at a solid investment opportunity.

Other factors that need to be investigated before an investment can be made include the type of market the IPO is being released into, the companies or individuals who are releasing IPO, and other factors that affect the value of the investment once it hits the open market.

If you take all of these aspects of the IPO into consideration, you will certainly make a decent investment once you are finally ready to purchase the IPO. As long as you know that you are purchasing a company that is worth more than the value you are buying it for, or the services and products the business is offering are more valuable than the company is currently being evaluated for, your IPO valuation will yield you profitable results.

There are many things to consider on how to IPO properly and legally. For more information about the New IPO process, be sure to consult with the professionals.

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Important Concepts Of Initial Public Offering / IPO Investing Strategies

Thursday, February 25th, 2010

Are you searching for the most profitable avenues of investment that are available to you today? Are you wondering which stocks hold the most promise? Are you also hoping to avoid facing any issues due to overpriced stocks? If you are searching for the perfect type of stock to invest into, you should certainly seek out initial public offering / IPO opportunities.

When you invest into new IPO stocks, you are obtaining a very unique opportunity to invest into a company before the rest of the market has been given a chance to invest themselves. By investing into a stock early, you can be sure that you will be able to get into the stock for the best price overall. You can also be sure that you are teaming up with a company the moment before it is about to see some fairly substantial recognition within the marketplace.

There are a few factors you may want to consider before you purchase an IPO stock though. You should certainly consider the quality of the business you are looking at, the financials of the company, as well as the amount of promise the company holds for the future, if you want to be certain the investment will actually increase in value over time.

When you are just getting started in IPO investing, you should remember that this can be one of the most difficult kinds of shares to assess. When a stock has just come to the market, it can be practically impossible to gauge how much demand and interest the company will generate in the open marketplace. It can also be difficult to ascertain whether or not the value will even be maintained at its current value.

For this reason, when you are investing into stocks of this nature, you should certainly make sure you do quite a bit of research to make sure you know everything there is to know about the company you are purchasing.

When you are investing into IPO stocks, you should remember that the primary reason why most companies are listed as an IPO on the open market is for capital raising. When a company is placed on the open market, they are in a very good position to create a large amount of capital for their business ventures. There really isn’t any other method available in the marketplace that is more lucrative than selling shares to the public. When a company sells shares to the public, they can generate millions of dollars for their business activities.

Even though the fact that the company is making plans for expansion, you should still keep in mind that these stocks are not guaranteed to rise over time. You should remember that there is simply a plan in place for the company to increase the value of its operation over time through many channels of business activity, no guarantees that it will increase in value as a result.

If you want to estimate how profitable the initial public offering / IPO will be for the company, you should certainly make sure you understand where the extra capital will be going from the IPO offering. If you find that the capital will be going into store expansions and other production expanding areas of the business like this, you can take that into account and weigh it into your decision on whether or not you should purchase the stock being listed on the market.

There are many things to consider on how to IPO properly and legally. For more information about the IPO process, be sure to consult with the professionals.

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What Is The IPO Process?

Saturday, February 20th, 2010

An initial public offering or IPO is a mechanism for companies to make available for the first time shares of their stock. Its purpose is to either raise capital for a new company or to fulfill a desire by an existing company to make their shares available to the public. Whether it is a new or existing company, the IPO process follows a fairly straight forward path with precise steps along the way.

The first thing a company must do before issuing stock is file a registration with the Securities and Exchange Commission (SEC.) Since the SEC has the power of nullifying any attempt to go public, a companys statement must be thoroughly accurate. Data concerning the financial health of the company must be entirely truthful. Due diligence should be the order of the day. Putting a company out onto the IPO Market is serious business. Every step in the IPO Process must be done carefully.

After (and sometimes before) the registration statement is finished, companies engage the services of one or more investment bankers. The role of any investment banker(s) is mostly twofold. First, it is to distribute the companys prospectus to prospective buyers of the stock. The prospectus is a legal document that details among other things the companys market, financial statements, executive biographies, and a projected price range for the stock. It is sometimes referred to as a red herring. It is so named because on the cover of the prospectus, and in red ink, is a notice from the SEC that the companys stock may not be bought or sold until the registration statement has been approved.

The second function of an investment banker or underwriter is to buy the companys shares and resell them to the public. Usually a road show, is launched, during which the investment banker and company executives engage potential investors to explain company strategy and promote the stock.

Since a company is selling stock to an underwriter instead of directly in the marketplace, such as the New York Stock Exchange, they are mitigating their risk in the market. Further, they are able to receive their monies upfront and do not have to incur costs of promotion. The downside for the company is that it forfeits the chance of higher stock prices that could have been created by the market.

The above does not happen until SEC approval has been granted. After approval and usually a day or so before the actual public offering, the company and the investment banker agree on a share price and the number of shares to be sold. The offering is complete when the company receives the money and delivers the shares to the underwriter.

Underwriters do extensive research before committing to buy a companys securities. They take on a calculated risk, essentially betting that the price per share they pay out to a company will be less than what the market is willing to pay for it. Opportunities for huge profits -and losses- exist in this environment.

While, the risk is high for the investment banker, the IPO process provides very exciting opportunities for investors. The idea of getting involved with the next giant high-tech company during its early stages can mean great profit down the road.

We are a tax and advisory firm, as part of an international network under one name. We act with integrity and always strive to achieve professionalism. If you want to know how to IPO or the IPO How, we have the people with the expertise.

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The Benefits Of A Business Going Public

Wednesday, January 27th, 2010

After a company has been in business for a while and begins to see success, they will start to contemplate taking the business public. Going public means the business will have stock and shareholders. There are a number of reasons why companies go public which is mainly due to the many benefits that come with such a high profile venture.

The following outlines the benefits of a business going public:

Increase Capital: By going public, a company will able to raise millions in capital. You can increase your business’s capital by selling stock on the open market. By implementing an Initial Public Offering (IPO), one can raise a significant amount of capital such as by selling stock and issuing bonds, for such business activities as increasing revenue, marketing, expanding, eliminating debt, research, business development, and increasing corporate diversity. Public companies have a greater valuation than private companies.

Liquidity: With an increase in its liquidity, the value of the public company will be higher because buyers and sellers are more able to engage in market participation. Going public allows a company to create a market for its stock. Liquidity can also provide an investor with more options such as increasing the diversity of their portfolio, makes it easier to buy and sell, and has a more adjustable asset allowance.

Mergers and Acquisitions: A publicly traded company can use their stocks as cash when acquiring or merging with other businesses. With the increase in its liquidity, it makes the business more attractive for mergers and acquisition proposals. It will increase the profile of the business and boost consumer confidence making it a good choice for other companies looking for new investment opportunities.

Increase Future Profitability and Sustainability: In order for a company to ensure its future as a thriving and financially stable business, it is essential to have access to new and future capital. Because on average an IPO can raise any where from $25 – 50M, going public will allow them to establish capital for the future. As well, they have the ability go back to the market to raise more capital when needed. Once public, the company will be seen as a safer investment risk, which will help in obtaining better financing terms when seeking loans.

Attract Top Employees: Because businesses are always competing for the most talented staff, offering stocks and stock options along with salary, gives that business a competitive edge. Providing stock as a reward for high productivity is often more economical than giving out cash bonuses.

Improve a Company’s Image: The image of a business is a key part of achieving success. Because public companies have higher profiles than private businesses, it helps with increasing sales, attracting more customers and establishing a loyal customer base, and acquiring long term business contracts. Publicizing the business along with a compelling marketing strategy will significantly help with the growth of the business. Over time the prestige of the company will increase as well as creating brand recognition.

A company that does not go public will often have a much more difficult time growing and expanding. A company with big ambitions will normally take their business public to take advantage of all of the opportunities available which will help them to succeed long term.

For more information about making an initial public offering, be sure to consult with the professionals. There are many things to consider on how to IPO properly and legally.

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The Process Of Making An IPO In Canada

Wednesday, January 27th, 2010

Every business owner wants to see their company develop and thrive for years. Taking your business public, or making an Initial Public Offering (IPO), is an essential step to growing your business. Going public is the process of offering new equity such as stocks, shares, trust units, partnership units, etc. Whatever your reasons for going public, there is a process that must be followed before the company can actually go public.

The following is the general process of making an IPO Canada:

1. IPO Preparation: You will be required to have a solid and detailed business plan. It will be helpful when creating the prospectus. A prospectus is a document that gives all of the information that investors require to make an informed investment decision. It will contain such information as financial data and information about the company including its history, future prospects, employee salaries, legal fees, any risks, and other relevant information. It is important to be aware that there will be costs associated with going public. As well, when you prepare the prospectus, you will have to assess pros and cons of going public to determine if it is a worthwhile venture.

2. Develop an Action Plan: Once you have a business plan, you will know what you must have in order to go public. Your financial statements must be in order and current. You must have an expert to advise you on any required management restructuring. You should also have created an IPO advisory group to help with establishing business relationships and marketing strategies.

3. Undergoing Due Diligence: This is when the underwriters and their lawyers perform a methodical examination of all areas of the company. It usually takes about 60 days to complete. The underwriters’ lawyers will ask for any relevant business documents and provide a questionnaire for the company’s directors and officers. There will also be meetings to ask questions.

4. Building a Public Profile: You will have to generate public interest in your company in order to attract investors. You should develop solid business relationships with your advisors to create a professional and credible reputation. Your IPO team of professionals and your chief underwriter will make presentations to the business and investment community. It normally consists of traveling to a number of key cities. During this time, a solid market strategy is essential.

5. Market Pricing: The underwriters will monitor market conditions and experiment with market pricing. As well, the underwriters will normally suggest the final price and offering size. It is important to remember that the biggest cost during a public offering is the underwriters’ fees expenses associated with the offering.

The final process of making an IPO Canada is making sure your company appears to be a professional and competently run business. You have to make sure the authority structure is in place and the employees and investors understand the structure. Preparing for an IPO takes a lot of thought, assessment, and planning. By understanding what the process entails, you will have a much smoother private to public transition.

For more information about making an IPO Canada, be sure to consult with the professionals. There are many things to consider on IPO How properly and legally.

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Is Your Company Going Public? Grow Quicker With Good Publicity

Monday, December 21st, 2009

As a publicist, I can’t help but laugh when I turn on the television to see an author on a talk show telling the audience about their book or flip on the radio in my car and hear the morning DJ interviewing a self proclaimed expert of some new weight loss program where you can lose 500 pounds in 48 hours.

I’m not laughing because of the content but because I know how much they had to pay a publicist to get that interview. I know that all the questions are predetermined and that the publicist who convinced this individual that TV and radio were the only way to get in front of the public is living in the’70’s and can’t seem to adjust to the new concepts of massive publicity for pennies and the young, hip publicists that have transformed the process of ga

I don’t mean to offend any publicists out there but I’m going to tell the public a little secret. If you are seeking massive explosions of publicity for your business, book, musical act or future celebrity, there is a process that will blast your ‘brand’ to 10,000,000’s overnight. There is a process that will put your brand in front of your target market in hours, not weeks. There is no waiting on approval from a television network or radio channel.

That secret process is a combination on online video distribution, press releases, article marketing, social book marketing, blogs and a few other online media distribution combination that will take your brand campaign from 0 mph to 100mph overnight. When you are interviewing publicists or brand recognition marketing specialist keep this in mind, any publicist can get you on TV or the radio with a couple calls since both of these media genres are constantly in need of content and truth be told, the results you’ll get are very minimal from these to publicity mediums.

The central questioning of your interview should be quizzing them on their online media campaigns and viral media expertise. Don’t spend a dime until they’ve convinced you that their online strategies are on the cutting edge and cost effective. Online marketing strategies can literally have the internet screaming your name in hours.

Want Publicity, that works? Check out Princeton Corporate Solutions. Call 267-233-0183 for a Publicity Marketing firm that can deliver.

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Take Your Company Public: How To Go Public Cheap!

Friday, December 18th, 2009

Raising money has become quite a chore in this depressing economic state so entrepreneurs are thinking outside the box when it comes to obtaining funds for their start-up corporations or businesses in expansion. Institutional lenders are a thing of the past, liberal hedge fund lenders are a mere cast skin of what they once were and with the massive infiltration of scams like shelf corporations and public shells leave the minds of individuals trying to raise funds in perpetual skeptic mode. Though the banks have brought small and medium size business lending to a screeching halt, there are still various turnkey methods that one can facilitate in order to raise the optimal amount of funds needed to pursue their venture.

Have you considered taking your company public? Don’t be scared off by the nightmare stories of needing millions in financial backing or the critical and ultra costly SOX 404 audits that can make or break your efforts. There are several ways to raise public capital in a cost effective and rapid turnaround process. If you are considering a public offering in the United States, your options are OTCBB, Pink Sheets, Reverse Merger (not recommended), IPO and Private Placement Memorandum. Obviously the IPO is the most sought after method of raising public funds but it is the most expensive and longest route to funding. OTCBB and Pink Sheets are a great way to raise capital without the expense of an IPO but be prepared to battle investor skepticism and ‘pump ‘em and dump ‘em’ securities scrappers who can have you on cloud nine and swimming in a surplus of cash one day and broke as a joke the next.

The next method that one will run into on their trek to raise capital is the mysterious reverse merger into a public shell. You’ll hear many entrepreneurs talk about this method but few actually understand the intricacies of this process and sadly don’t realize it’s high failure rate until they are sitting alone at their office at 2 am holding their head in their hands when faced with the reality that 99.9% of reverse mergers into shell companies don’t work and they just threw away $200k.

The safest, cheapest and quickest way to raise capital from the public is by way of Regulation D exemption rules 504, 505 and 506. This process is also referred to as a Private Placement Memorandum, Private Placement Memo, Offering Memorandum or PPM. After simply having a professional business plan authored and geared toward raising capital with a PPM, the next step is to see a professional about the Regulation D facilitation. You can pay $20k to an attorney or you can spend around $5k to use a consultant, most companies choose the later. After you’ve had the PPM docs customized, you’re ready to go! Most Private Placement Memorandums only take 2 weeks to put together and file (form d) with the SEC office and then you’re off and running!

PPM’s are becoming more and more popular as informed entrepreneurs are seeking capital but want to hold on to a majority share of their company. If you are trying to raise capital for your small or medium size business or wish to increase your company value exponentially in an expedient manner, start looking into having a Private Placement Memorandum authored for your company. It is absolutely the fastest and easiest way to raise capital for your business without all the expense and red tape of other public fund raising processes.

Want to find out more about Taking Your Company Public, then visit Princeton Corporate Solutions’ site or call 267-233-0183. Go Public fast and easy!

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Take Your Company Public: Your Technology Business Can Raise Capital Fast!

Friday, December 18th, 2009

Are you trying to raise capital for your start-up or corporation in expansion? Have you exhausted your traditional institutional sources and hedge fund contacts? Don’t lose hope just yet! First of all, take all those pamphlets and brochures from banks and other traditional lenders that are lying all over your desk and toss them in the trash…they are absolutely useless.

Banks don’t have your company’s best interest in mind as they are hardly even staying afloat in this economy. Today’s institutional financier isn’t qualified to run a bath let alone a bank. Don’t put your future in the untested hands of a 20 something knucklehead. After you’ve tossed all that useless info in the trash, clear your head and then look at your company and ask yourself a few tough questions: Is your company invest-able? Do you and your executive staff have a pedigree that investors deem as seasoned enough to take their money and make affective use of it and not lose it? What proprietary concepts/technology/patents do you have that give you a larger market share with the proper cash infusion? What is your current capital/debt situation?

If, after pondering these questions you’ve come to the conclusion you honestly, truly have something worth pursuing then the next step is to look at the reality that your company is worthy of a public offering. Stay away from Pink Sheets and be weary of reverse mergers and in reality your company won’t qualify for the NASDAQ so the quickest way to raise public capital is the OTCBB (over the counter bulletin boards).

OTCBB is an SEC regulated platform that has a solid investor following and market makers that can effectively promote your stock to rapidly raise capital. Don’t let these difficult economic times steal your dreams of corporate prosperity and personal growth.

If you have a solid business concept, there is a way to fund it. Look into the OTCBB, it’s your best bet for an inexpensive public offering with a direct path to long term funding.

Want To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

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Take Your Company Public: Take Your Start-up Public

Friday, December 18th, 2009

Are you trying to raise capital for your business? Have you been turned down by institutional lenders for loans and corporate lines of credit? Why deal with the hassle and embarrassment of perpetual declines and risk losing your business because of lack of cash? Wouldn’t it be great to raise capital quickly and easily for your company without constantly having to fill out scores of credit applications to stay afloat?

The important thing to realize is that if you are a small or medium size business and even if you are a start-up you can take your company public on OTCBB. When going public you really have two viable options: first, most people consider the IPO, but very few qualify because of the necessity of massive amounts of capital in reserve, SOX 404, extensive time in business and finding a broker dealer to take you through the process; the second option is taking your company public OTCBB (over the counter bulletin boards), this process is inexpensive, lightning fast, minimal qualifications and offers start-ups and small/medium size business the ability to raise gargantuan amounts of capital from investors worldwide.

There is no other way to go public on a legitimate platform. With Pink Sheets and Reverse Mergers you’ll only get burned so buyer beware! Are you short on cash? A popular mechanism for raising the initial capital to go public via OTCBB is by using a Private Placement Memorandum (Regulation D Rule 504) with a built in mini/maxi.

Right when you hit that minimum you can start using capital to grow your company while simultaneously initiating the ‘going public’ process.

The moral of this story…even if you’re a startup or small business owner you can raise capital by going public! Get informed and get funded.

Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

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