Companies all over the world need liquid assets to start, grow or save their businesses. There are several options for companies to get access to these assets, such as the classical use of revenues or to raise a credit at a bank. But these options are maybe not sufficient enough or limited in time. To reach their goals companies can raise the funds in the capital market through an initial public offering.
Due to the advancing globalization and digitalization companies theoretically can gather money through the IPO from all over the world. As the IPO is considered to be one of the most significant events in the life cycle of companies a profound analysis of the advantages and disadvantages of IPOs is needed to be conducted by the companies.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Statement of the problem
- Approach and goal of this paper
- Initial Public Offering
- Reasons for IPOs
- Process of the IPO
- Risks of IPOs
- Costs
- Underpricing
- Reduction in amount of share
- Unfriendly takeover
- IPOs of Facebook and Twitter
- Conclusion
- Critical appraisal
- Development of international IPO market
- Alternatives to IPOS
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to explore the intricacies of the Initial Public Offering (IPO) process, focusing on the risks associated with this significant event in a company's life cycle. The paper will examine the theoretical framework of IPOs, including their rationale and associated risks, and then analyze the practical aspects of IPOs through case studies of Facebook and Twitter.
- Reasons for undertaking an IPO
- Risks associated with the IPO process
- The process and practical considerations of IPOs
- Real-world examples of successful IPOs
- The development of the international IPO market
Zusammenfassung der Kapitel (Chapter Summaries)
The introductory chapter establishes the paper's focus on the risks associated with the IPO process. It outlines the paper's approach and objectives, emphasizing the importance of understanding these risks for companies considering going public.
Chapter 2 delves into the concept of the Initial Public Offering (IPO), explaining the distinction between primary and secondary markets. It discusses the key reasons why companies choose to go public, both financially and non-financially motivated. The chapter also provides a detailed overview of the IPO process itself.
Chapter 3 focuses on the inherent risks associated with IPOs. The chapter explores various categories of risk, including cost, underpricing, share reduction, and the threat of unfriendly takeovers. Each risk is analyzed in detail, highlighting its potential impact on companies undertaking an IPO.
Schlüsselwörter (Keywords)
This paper delves into the complexities of Initial Public Offerings (IPOs), exploring their motivations, risks, and practical implications. The focus lies on the IPO process, examining factors such as cost, underpricing, and the potential for unfriendly takeovers. The paper also explores the global IPO market, providing insights into the strategic considerations companies must navigate when seeking public listing.
- Quote paper
- Tim Meierkord (Author), 2016, Risks during the IPO Process, Munich, GRIN Verlag, https://www.grin.com/document/349158
