IPO as a Key Process for a Successful Company

Ruge Zhang

doi:10.54691/bcpbm.v46i.5094

Authors

Ruge Zhang

DOI:

https://doi.org/10.54691/bcpbm.v46i.5094

Keywords:

Initial public offering; funding; valuation.

Abstract

IPO is the most popular business practice today, which can be seen as the key to a successful company. IPO could bring a lot of benefits to the company like additional capital raised, a better international reputation, deeper consumer recognition, liquidate benefits for the shareholders and investors, greater employee benefits, and higher valuation because of transparency, compared to a private business. During the crisis, there was less focus on maximizing IPO proceeds due to both an increased emphasis on research coverage and allocations of hot IPOs to the personal brokerage accounts of issuing firm executives. But the company should consider the costs of IPOs carefully, initial underpricing is likely to cause underperformance in the long run, mandatory disclosures may increase the competitive cost, especially for biotech companies, and the substantial fees of an IPO have to be considered. In this paper, a literature study of the pros and cons of an IPO and IPOs are crucial to the development of a business.

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