Forced Initial Public Offering - IPO


DEFINITION of 'Forced Initial Public Offering - IPO'

An instance in which a company is forced into issuing shares to the public for the first time. Forced IPOs occur when a company goes public due to certain conditions being met which are set by the securities regulatory body of the country. Initial public offerings are usually conducted at the discretion of the current management and/or owners of the private company.

BREAKING DOWN 'Forced Initial Public Offering - IPO'

The Securities and Exchange Commission (SEC) sets the standards for companies which must go public in the U.S. For example, if the company has a certain amount of assets (around 10 million) and there are more than 500 shareholders of record, the company needs to start disclosing specific financial information publicly and in a timely manner. Some companies might not want to go public because it means increased oversight and reporting standards which usually means increased costs. The reason for the law is to increase transparency and reduce risks for investors.

  1. Death Star IPO

    A company's highly anticipated initial public offering (IPO) ...
  2. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  3. Quiet Period

    In terms of an IPO, the period where an issuer is subject to ...
  4. Waiting Period

    1. The period of time between filing a registration statement ...
  5. Shelf Registration

    A regulation that a corporation can evoke to comply with U.S. ...
  6. IPO Lock-Up

    A contractual caveat referring to a period of time after a company ...
Related Articles
  1. Investing Basics

    5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  2. Retirement

    Pages From The Bad CEO Playbook

    Excess compensation, golden parachutes, tunneling and IPO spinning make these bad executives even worse.
  3. Fundamental Analysis

    How The Sarbanes-Oxley Era Affected IPOs

    After the infamous collapse of companies like Tyco, Enron and WorldCom, the government responded to try and prevent it from happening again.
  4. Mutual Funds & ETFs

    Investing In IPO ETFs

    Learn the history, rules and risks of investing in IPO exchange-traded funds.
  5. Investing Basics

    IPO Lock-Ups Stop Insider Selling

    Ownership plays a key role when companies go public. Find out how.
  6. Insurance

    Free Markets: What's The Cost?

    Some argue that when the free market fails to protect consumers, government regulation is required.
  7. Options & Futures

    Greenshoe Options: An IPO's Best Friend

    Find out how companies can save or boost their public offering price with these options.
  8. Professionals

    The Best Financial Modeling Courses for Investment Bankers

    Obtain information, both general and comparative, about the best available financial modeling courses for individuals pursuing a career in investment banking.
  9. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  10. Stock Analysis

    GoPro's Stock: Can it Fall Much Further? (GPRO)

    As a company that primarily sells discretionary products, GoPro and its potential falls right in line with consumer trends. Is that good or bad?
  1. When did Facebook go public?

    Facebook, Inc. (NASDAQ: FB) went public with its initial public offering (IPO) on May 18, 2012. With a peak market capitalization ... Read Full Answer >>
  2. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  3. How does investment banking differ from commercial banking?

    Investment banking and commercial banking are two primary segments of the banking industry. Investment banks facilitate the ... Read Full Answer >>
  4. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
  5. Why would a company decide to utilize H-shares over A-shares in its IPO?

    A company would decide to utilize H shares over A shares in its initial public offering (IPO) if that company believes it ... Read Full Answer >>
  6. How do I place a buy limit order if I want to buy a stock during an initial public ...

    During an initial public offering, or IPO, a trader may place a buy limit order by choosing "Buy" and "Limit" in the order ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center