A:

An initial public offering, or IPO, is the first sale of stock by a new company, usually a private company trying to go public. An IPO often serves as a way for companies to raise capital for funding current operations and new business opportunities. To get in on an IPO, you will need to find a company that is about to go public. This is done by searching S-1 forms filed with the Securities and Exchange Commission. To participate in an IPO, an investor has to be registered with a brokerage firm. When companies issue IPOs, they notify brokerage firms, which in turn notify investors. (Thinking of investing here? We give you five tips to remember in The Murky Waters Of The IPO Market.)

Most brokerage firms require that investors meet some qualifications before they can participate in an IPO. Some brokerage firms might specify that only investors with a certain amount of money in their brokerage accounts or a certain number of transactions can participate in IPOs. If you are qualified to participate in IPOs, the firm will usually have you sign up for IPO notification services, so that you are alerted when there are any new IPOs that meet your investment profile. If you are interested in participating in an IPO, contact a brokerage firm and ask for its requirements.

This question was answered by Chizoba Morah.

RELATED FAQS

  1. How does the strength of the IPO market affect the drugs sector?

    Discover how the strength of the IPO market affects the drugs sector. A strong IPO market reflects healthy risk appetites ...
  2. Why are some spin-offs taxable and some are tax-free?

    Learn how spinoffs of subsidiaries from a parent company are typically done, and what determines whether a spinoff is taxable ...
  3. How does an underwriter syndicate work together on an initial public offering (IPO)?

    Learn how underwriting syndicates work together when helping a company undertake an initial public offering, and learn about ...
  4. What is the average range for the price-to-earnings ratio in the electronics sector?

    Understand the difference between the primary market and the secondary market, and learn which investors are able to participate ...
RELATED TERMS
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or ...
  2. Red Herring

    A preliminary prospectus filed by a company with the Securities ...
  3. Muppet Bait

    Naive investors who are lured into buying hot stocks or securities ...
  4. At A Discount

    This specifically refers to stock that is sold for less than ...
  5. Aftermarket Report

    A summary of how shares of an initial public offering (IPO) performed ...
  6. Small Corporate Offering Registration - SCOR

    A form of corporate securities registration designed to reduce ...

You May Also Like

Related Articles
  1. Entrepreneurship

    Should I Have An IPO on My Business

  2. Fundamental Analysis

    Why Investment Bank IPO Valuations Go ...

  3. Stock Analysis

    Adjusting Price Charts To Secondary ...

  4. Investing

    How To Track Upcoming IPOs

  5. Investing Basics

    Social Media: High Risk, High Potential ...

Trading Center