Initial Public Offerings

8
Bumper logo

Bumper Bites

IPO Chart

Before a stock can reach the stock market or an exchange it must first be publicly traded. This would explain why you can’t buy shares of your local grocery store on the stock market. Most companies are similar to your local grocery store; they are held privately by only a few owners.


To become a publicly traded company and issue stock on the stock market, a private company must file an initial public offering (IPO). You might have heard of the term before. It's a big deal in the news and excites investors to investigate a new stock to purchase. 


The purpose of the IPO is to provide shares of a private company to the public to purchase. Having the ability to be publicly traded provides the company with more capital to expand and grow. However, the company is now under more scrutiny and is required to be highly transparent with investors.


Think about it like getting your driver's license. Once you reach the age of 16, you are handed over the keys! You now have the freedom to explore, but you have to be diligent and careful of other drivers. If you are not, you can cause an accident.


Similar to having to take a drivers test, a private company must go through a variety of assessments to ensure that all information is correct to qualify for an IPO. The SEC policies this process and makes sure that all information is accurate to provide the public with the highest quality of information. 


After a company has passed, its shares are issued to the public for investors to buy. On an IPOs first trading day, they are known to be highly volatile due to their high level of media attention. It is important for investors to investigate the company deeper and consider the risk and reward before making an investment decision. 


IPOs are the new shiny car on the block. However, make sure they work before you buy one. Now, let’s get into long and short positions.

Source:  Investopedia | IPO

Previous Div

Next Div

Disclosure: This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Alpaca is not registered (Alpaca is registered only in the United States). All investments are subject to investment risks, including possible loss of the principal amount invested.
Disclosure: Alpaca does not make recommendations with regard to fractional share trading, whether to use fractional shares at all, or whether to invest in any specific security. A security's eligibility on the list of fractional shares available for trading is not an endorsement of any of the securities, nor is it intended to convey that such stocks have low risk. Fractional share transactions are executed either on principal or riskless principal basis, and can only be bought or sold with market orders during market orders.
Equip Solutions, Inc. ("Bumper") and Alpaca Securities LLC ("Alpaca") are not affiliated and neither are responsible for the liabilities of the other.

Technology is offered by Equip Solutions, Inc.

Brokerage services are provided by Alpaca Securities LLC ("Alpaca”), member FINRA, a wholly-owned subsidiary of AlpacaDB, Inc. Clearing services are provided by Velox Clearing LLC (Velox) and Vision Financial Markets LLC (Vision). All three are members of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash) per customer. Explanatory brochure available upon request or at www.sipc.org.

This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Alpaca is not registered (Alpaca is registered only in the United States).

View Alpaca's disclosures at: https://alpaca.markets/disclosures

Alpaca does not make recommendations with regard to fractional share trading, whether to use fractional shares at all, or whether to invest in any specific security. A security’s eligibility on the list of fractional shares available for trading is not an endorsement of any of the securities, nor is it intended to convey that such stocks have low risk. Fractional share transactions are executed either on a principal or riskless principal basis, and can only be bought or sold with market orders during normal market hours.

The content on this website is for illustrative and informational purposes only and any historical returns, expected returns or projections are hypothetical in nature. Investing involves risk & investments may lose value, including the loss of principal. Past performance does not guarantee future returns or results. Before investing, carefully consider your investment objectives, time horizon, and overall risk tolerance as well as the information stated in the product offering prospectuses.