Going Public – IPO Lecture 《金融市场学》课件.ppt

Going Public – IPO Lecture Venture Capital Process Going Public - Details Forms (audited financials) S-1 (large offerings) SB-1 ($10m) SCOR ($1m) Direct Public Offering (DPO) Usually issue 20-40% Primary v. Secondary issue (unseasoned v. seasoned) The benefits of IPO Enhance the corporate’s reputation Increase the game capability with the financial institutions Establishing a new raising funds method by capital market Received the capital advantage in more cheaper funds IPO process On the Road Underwriters and management team put together road show for prospective big investors, no media, last about 2 weeks; major cities. Can discuss business prospects, but only orally; can expand the prospectus but not differ from prospectus Lead underwriter gets indication of interest Final prospectus is printed, distributed for investors Investors subscribe to stock at an offering price After market closes, day before public trading (IPO declared effective) List of buy/sell orders called the book Difference between offering price and syndicate price about 7 to 8% (gross spread) – split between broker and underwriter IPO process 6 to 8 weeks before SEC registration Issue Red Herring to see interest (filed with SEC) –no price or size Called Red Herring because of statements outlined in “RED” Hold All-hands meeting, for IPO team and lead underwriter to decide responsibilities Start developing final prospectus SEC Registration Filing of S-1 documents and prospectus SEC imposes quiet period (until 25 days after IPO) SEC reviews documents Form syndicate Lead underwrite forms group of underwriters to help sell deal, syndicate members are allocated shares to sell (best-effort or bought deal/firm commitment) IPO process Market opens, stock trades Lead underwriter responsible for smooth trading Can support stock, become market maker (SEC rules) Research: Over 50% of trading volume for first couple months Research: Buy back stock after trading (4% to 22%) – Why? Impose penalty bids on br