Jetblue's Ipo Case Study

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Initial Public Offering is a kind of public offering where a company sold shares of stock to the general public, on a securities exchange for the first time. Companies use initial public offerings to drive expansion capital up in order to make profits from the investment of early private investors possibly and to become as publicly traded enterprises. Shares are sold by a company without a requirement of repaying the capital to its public investors. After the IPO, money passes between investors while shares are free trading in the open market. For businesses, stocks and shares are a quick method to increase revenue for expansion and growth of company. Going to public will make company become publicly traded and benefit from new, larger opportunities then is able to work towards incorporations and even worldwide expansion. IPO makes company access to public capital fast and as well as a relative low risk for business and have the potential chance for huge gains. More investors wish to invest in company will lead to the more company stands to or from IPOs and other stock offerings. For the investor, IPO is attractive due to it might be undervalued. At the first, many companies will provide their IPO rates at a very low level in order to attractive investors. It encourages investors to buy IPOs and make a statement that the new or newly public company will make a huge profit margin. Since prices up and demand for the IPOs increases, early investors stand to earn profits very quickly. In this case, JetBlue’s management was ready to improve additional capital through a public equity offering. In spite of the company facing the challenges of U.S airline industry following the terrorist attacks of September 2001, it still maintains profitability and aggressive growth. Meanwhile, JetBlue goes to public to support JetBlue’s growth expectation and on the other hand, offset the losses of portfolio from its venture-capital investors. However, there was some debate among...
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