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What is IPO?

What is IPO?

IPO (Initial Public Offering) – one of the most important investment tools, which is the initial offer of shares of a company to a wide range of persons, after which company's shares become free-floating (on stock exchanges or OTC platforms). Opportunities for investing in IPOs are actively discussed around the world: on average, a return on participation in an IPO is much higher than usual investment in securities. IPOs are mainly held in the US, as well as in Europe and Asia.

Initial placement of shares on a stock exchange is carried out to attract additional funds directed to various needs of a company. The money received from the sale of shares is used by majority shareholders and management of a company to provide new projects, upgrade equipment and improve the overall value of the business (including, paying off company's debts). IPO is a complex and multi-layer process, which is organized by special financial institutions (banks-organizers and underwriters). But not everyone who wants to buy shares in an IPO can do so. Shares on the day after an IPO sometimes grow (by 25-50%) due to the fact that not everyone was able to participate in an IPO. Freedom Finance offers all its clients such a unique, in its kind, service.

For many investors, IPO is a great opportunity to make extra money on investments in securities. But the reality is that an initial public offering can bring both substantial returns and frustration to new shareholders. Even if a company (Issuer of shares) successfully held a road-show and its shares were sold out during an IPO, it is not a guarantee that on the next day shares should grow significantly in price. Also, shares can fall in price for some time (as it was the case with Facebook shares).

Earning potential of IPO

To avoid such situations and to minimize risks, our professional analysts conduct a detailed assessment of companies offering their shares for sale.

The successful results of many IPOs confirm the effectiveness of this investment tool. The American company EventBrite, which provides ticketing services, was recommended by us as an investment object in September 2018. Despite low initial valuation of third-party experts, the company's shares rose by 58.7% during debut stock trading and amounted to $36.50.

Another stock hit of 2018 is the online service Dropbox, which first appeared on the exchange in the Spring of 2018. Investors were hungry for major technology projects: on the first day of trading, demand for Dropbox shares exceeded supply by 25 times, and the total IPO amounted to $756 million. A good growth of the shares of Tenable IT-company was also predicted by our analysts: the company's securities rose by 40% on the first day of trading.

Our company offers its clients to invest in securities on favorable terms. IPO opportunities are confirmed by impressive results: over the past 5 years, initial placements of companies have attracted more than $7 trillion. The average annual return on participation in an IPO with Freedom Finance is more than 35%. Our analysts will help you to choose the most promising offers in the financial market, and you will invest in successful projects!