How can average investors get involved in an IPO?

By Chizoba Morah AAA
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.)

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Watch: Initial Public Offering (IPO)

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.

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