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25 Words
To Go Public

Careful thought, preparation and planning are the key to taking your company public.

Investopedia's "25 Words to Go Public" guide helps company leaders understand the critical mechanics of the process, from IPO Valuation and Direct Listings, to DMMs and Bookrunners. Do you know all 25?

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25 Words To Go Public
IPO Valuation

There’s a big difference between fundamental valuation, supply & demand, and what’s written on the ‘first trade’ ticket.

About IPOs
Related Terms
  • Pre-IPO Placement
    Pre-IPO placement is when a portion of an initial public offering (IPO) is placed with private investors right before the IPO is scheduled to hit the market. Full Definition
  • Book Building
    Book building is the process by which an underwriter attempts to determine the price to place a securities offering based on demand from institutional investors. Full Definition
  • Price Discovery
    Price discovery is the process of setting the spot price, but most commonly the proper price, for a security, commodity or currency. Full Definition
  • Dividend Policy
    Dividend policy structures the dividend payout a company distributes to its shareholders. Full Definition
Direct Listings

New NYSE regulations let bigger companies do direct listings. The approach has its own set of pros and cons.

About IPOs
Related Terms
Designated Market Makers

DMMs are unique to the New York Stock Exchange. Here’s how they manage IPOs and liquidity events.

About IPOs
Related Terms
  • IPO Advisor
    An IPO advisor helps a company navigate the process of listing on a public exchange for the first time. Full Definition
  • Lead Underwriter
    A lead underwriter is usually an investment bank that organizes an IPO or a secondary offering for companies that are already publicly traded. Full Definition
  • Underwriter Syndicate
    An underwriter syndicate is a temporary group of investment banks and broker-dealers who come together to sell offerings of equity or debt securities. Full Definition
  • Book Runner
    A book runner is the main underwriter or lead manager in the issuance of new equity, debt, or securities instruments. Full Definition
IPO Process

An IPO isn’t a single moment. It’s a sequence of movements performed by an orchestra of players.

About IPOs
Related Terms
Post-IPO Pricing

Once a stock IPOs, a predictable series of liquidity events can strike in the first quarter.

About IPOs
Related Terms
  • Underwriting Agreement
    An underwriting agreement is a contract between a group of investment bankers in an underwriting syndicate and the issuer of a new securities offering. Full Definition
  • SEC Form S-1
    SEC Form S-1 is the initial registration form for new securities required by the Securities and Exchange Commission (SEC) for public companies. Full Definition
  • Preliminary Prospectus
    A preliminary prospectus is a first draft registration statement that a firm files prior to proceeding with an initial public offering (IPO) of their securities. Full Definition
  • Prospectus
    A prospectus is a document delivered to potential investors that contains important information about a mutual fund or a stock. Full Definition
  • Comfort Letter
    A comfort letter is a written document that provides a level of assurance that an obligation will be ultimately met. Full Definition
  • Quiet Period
    A quiet period is a period of time corporate managers are forbidden to talk or release new information, usually around an IPO. Full Definition
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