It is also worth noting that brokers tend to be selective about who they notify about each IPO. Investors could also be limited by the number of shares they can purchase, or in some cases, there is a minimum number of shares required to be purchased. Some brokerage houses receive more allocations than others. Whether you will gain access to a particular IPO also depends on the brokerage house you are using. To ensure that the entire first offering will be sold, companies tend to set their sights on institutional investors, therefore making IPOs tricky to access for retail investors.įor retail investors looking to invest in IPOs, they will typically have to engage with a stockbroker and have a broking account. Investing in IPOs can be challenging for some investors. Once approved by ASIC, the company can then make their initial public offering. The prospectus contains important information investors need to know about the company and the offer. When those factors have been determined, the company can then lodge a prospectus with the Australian Securities and Investment Commission (ASIC). When a company decides to go public, it first has to determine its financial goals, how much it will need to raise at the IPO, what securities it will offer and its initial listing price. The price of an IPO is usually set by a corporate adviser, investment bank or stockbroker, as the nominated person who will usually manage the process of listing the company. The company will make a decision about how many shares it would like to make available to the public to buy.
IPOs are an opportunity for investors to own shares in a growing business, and after the IPO investors will be able to sell or buy more shares on the stock market. What is an IPO?Īn initial public offering (IPO), also known as a float, is the first time the stock of a private company is available to the public. Now may be as good a time as any to explore IPOs, what they are and how they work.
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