Member in IPO

What is an IPO?

IPO (Initial Public Offering) This is the first public sale of shares of a company, which is a great opportunity to receive income greater than 20% per transaction, this as a result of Company specialists. Every year between 100 and 400 companies submit to these offers.

Why can it be a good option for an investor?

  • It can generate short-term gains of more than 20% for investors who acquire shares of these companies either in the period known as "Pre IPO" or at the beginning of the negotiation;
  • As a long-term investment, it provides the opportunity for the securities of these promising companies to be listed at maximum fair value, which generates increases in portfolio returns. Warren Buffett (one of the world's most famous investors) has it in his investment tactics;
  • During the period of the initial public offering, transactions can become more reliable, since it allows an approach to the company before taking the risk of acquiring shares, under the premise of not bearing losses due to changes in the price of these during the analysis.

What are these companies for?

  • Mostly to raise capital, since a large number of investors around the world are attentive to companies that invest in development;
  • As if this were not enough, with these actions, the company enables the possibility of obtaining loans based on the trust of its own shares, a situation that generates a positive effect for the future performance of the company, through the value of its shares as well as investor income. ;
  • One way for the company to have more liquidity is the issuance of shares, these can be used as a form of payment for employees in the form of a bonus or reward and can even be used to settle transactions;
  • Diversification becomes one of the most important factors, since in this way the assets are not concentrated in a single investor, but through the traders there are investors of different sizes.

Only 5 steps to earn an IPO

1. Preliminary details

Once the decision to issue securities has been made within the company, this decision is shared with the media. From this moment, the Company specialists begin with a detailed study of the company, its strengths and weaknesses, as well as the possible benefits that can be obtained.

2. Data Analysis

This stage is one of the most important, since here all the data and information previously provided begin to be verified by various analysts and our analysis department independently carries out an audit to ensure the authenticity of the information provided, to deliver this information to customers.

3. Marketing

The Company specialists get down to work to analyze the marketing strategies presented by the company in order to gauge how the demand for shares will occur. If there are negotiations between institutions and what has been the result of these.

4. Sign agreement

At this point, together with external collaborators, the issuing company determines the price that its initial public offering will have in the market. Right at this moment, the Company specialists will apply the information for each client, presenting each one with their investment plan based on individual expectations and limits established by each investor.

5. Shares on the stock market

The ultimate goal is to place the shares within the stock market itself, once the previous steps have been completed. At this step, the Company analysis department pays attention to the IPO of these shares so that our clients can open positions from the first minutes of trading, achieving returns of more than 20% per transaction on the first day of the IPO on the stock market.

Every year more than 200 IPOs can be seen on the United States stock market, although not all of them achieve the expected success once they are placed on the stock market. However, the ones that succeed become memorable.

Examples

Alibaba Group Holdings Ltd

E-Commerce Service

Price per share $ 68
First Day IPO Price $ 100
Sale Price $ 231.14

+78%

Alibaba Group Holdings Ltd.

The largest IPO in recent years was the placement of shares by Alibaba Group Holdings Ltd. in 2014. At the time of the placement, the company was valued at $ 170 billion, which yielded $ 68 per share. Already on the first day of trading, amid the hype, the price of a share reached the level of almost $ 100. This means investor income was over 40% on the first day. And after 2 months, when the value of the stock reached the level of $ 120, investor income amounted to about 78%. The historical maximum of the share price was reached in January 2020, the value reached the level of $ 231.14.

Snap Inc.

Messaging Application

Volume of placement $3,4 млрд.
Price per share $17
First Day IPO Price $24,48

+43%

Snap Inc.

Snap Inc. was perhaps the most anticipated technology IPO since Facebook. It debuted on March 2, 2017 and the placement volume was $ 3.4 billion. Shares were valued at $ 17 and closed their first trading day at $ 24.48, which gave investors about 43% of the first trading day.