Initial Public Offering for a Global Firm
Initial Public Offering is a rigorous process where a firm decides to go public in order to enable it raise capital for the company that will enable it to fund its operations such as expansion plans, generate profits as well as make its investors happy. For the IPO to go successfully there are a number of important factors and players that come into consideration. These include investment bankers, underwriters, pricing, demand and supply among other important factors. The role of investment Banker and underwriter
Investment banker plays an integral role in the IPO process as when a firm decides to go public it must hire an investment banker to conduct the whole process on its behalf. For instance, when Twitter decided to go public, it hired Barclays Bank to conduct the IPO process on its behalf. Investment Banker and the Underwriters work hand in hand with the company that is going public. This means that, the investment banker and underwriter are the initial buyers of a company stock that is usually offered to them at discount of the offering price. Underwriters play an important role in the IPO process. For instance, they are responsible for the advertisement of the IPO to the institutional investors who then table their bids for determination. After the tabling of the bids, it is the role of the underwriters to decide how to allocate the shares to the institutional investors. In fact, they are responsible for the type of investor they want to acquire stock at the company. For instance, reputation of the institutional investor is considered while allocating shares. Other important factors that are usually put into consideration include length of investment, that is long-term or short-term, and are the institutional investors domestic or foreign? The investment banker, normally known as the designated market maker receives orders from and takes quick look at the orders before deciding the opening price...
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