According to Rouse (2008), an initial public offering is aone time public sale of shares that have been previously owned privately.
It isoften referred to as ‘going public’. Shares become tradable on the stockexchange as soon as all initial public offerings have been sold. Companies dothis to majorly raise capital and investors can use the opportunity to makeprofit.ProspectusA prospectus is a document that invites the public topurchase shares of a company. It contains information about the company thatthe public needs to make informed decisions about the security. Companies thatrecently completed an IPOBlue Green VacationsBlue Green Vacations is a US vacation ownership company thatmanages resorts in leisure destinations and sells vacation ownership interests.Listed on the New York Stock Exchange as BXG.Listing Date – November 17, 2017.
The company intends to raise $100 millionthrough the IPO. “The company has been rebounding since the recession, withmore than 200,000 owners, 66 owned or managed resorts, and access to more than4,500 resorts worldwide” Pounds (2017).Original ListingPrice $14Current Listing Price$19.4852-wk high 19.
8552-wk low 12.50Why the difference – Initial listing price was set below therange of 16-18. Profitable company with a net profit margin of 10.22% for thequarter. ADTADT is a provider of security systems in the United Statesand Canada. It is America’s largest supplier of home security systems. Listed on the New York Stock Exchange as ADT.
Listing Date – January 19th2018. “ADT intends to use the gross proceeds from the offering to partiallyredeem outstanding second lien notes, and deposit approximately $750 million ofthe net proceeds from this offering into a separate account, which will be usedto redeem ADT Inc.’s preferred securities” Shockley(2008).
Original ListingPrice $14Current Listing $11.9152-wk high 12.9752-wk low 11.12Why the difference – Investors are not sure about thecompany, it has a debt of $10millionUSD. Company’s net profit margin for thequarter is -5.
73%.IPO Completed overa year ago Fulgent GeneticsFulgent genetics is a US based company that providesgenetics testing. It is listed on NASDAQ as FLGT.
Listing date- September 29 2016. Primary purpose of filingIPO is to initiate entry into the public market, facilitate future access andimprove company’s visibility. Proceeds will be used for company’s workingcapital and other corporate purposes.Original ListingPrice $9Current Listing $4.9952-wk high 13.4352-wk low 2.72Why the difference: Initial listing price too high, presenceof competitors.
Company also has a negative net income. ReferencesLast 100 IPOS (2018). Retrievedfrom https://www.iposcoop.com/last-100-ipos/Mishra, K.A. (2012, March 25).
Prospectus in Company Law. Retrievedfrom http://www.lawman.
comPounds, M.H. (2017, October 24). Bluegreen timeshare files for $100 millioninitial stock offering. Retrieved from http://www.sun-sentinel.
com/business/fl-bz-bluegreen-stock-offering-20171024-story.htmlRouse, Margaret. (2008, April08). IPO (initial public offering). Retrievedfrom http://searchcio.
techtarget.com/definition/IPOShockley, J (2018, January 18). ADT Prices Initial Public Offering.Retrieved from https://investor.adt.com/press-releases/press-release-details/2018/ADT-Prices-Initial-Public-Offering/default.aspx