What is an IPO? How does it work?
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An IPO is also referred to as a Public Offering. When a company initiates the IPO process, a very specific set of events occurs. The chosen Underwriters facilitate all of these steps.
- An external IPO team is formed, consisting of an Underwriter, Lawyers, Certified Public Accountants (CPAs) and Securities and Exchange Commission (SEC) experts.
- Information regarding the company is compiled, including financial performance and expected future operations. This becomes part of the company prospectus, which is circulated for review.
- The audited financial statements are included in the prospectus.
- The company files its prospectus with the SEC and sets a date for the offering.