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What is an IPO?
An IPO is a public offering of a company's shares on the stock exchange for the first time. Companies go public to sell their shares to potential investors and raise additional funds without taking a loan. Nonetheless, it still has numerous obligations before its investors.
Thanks to this placement, millions of people around the world can buy its shares, and the company itself gets additional capital to turn into profit, which it will share with investors.
Why are IPOs significant events in trader's life?
The price of stocks largely depends on the demand. When a stock is in demand, traders can make great profits by selling their stocks.
When Zoom went public in April 2019, its shares went up in price by 72% right away and attracted a lot of investors.
Investors expected Zoom to be a successful project and many bought its shares. That was one of the best decisions they made! In February 2020, when the whole world switched to remote work and education, many organizations began to actively use Zoom.
The success was tremendous because, in just three months, the stock price went up by 150%, reaching $300 compared to $36 at the time of an IPO.
A similar story can be told about Twitter. Back in 2013, the starting price of shares during an IPO was only $26 per share, but by the end of the day, they were selling for $45. A historical record of 76% monthly growth is still remembered.
How does the exchange work?
10 days before the main event
Information about the IPO is published.
Investors declare their interest in shares and send applications in advance.
Applications are still being accepted. However, due to the heavy load, the transaction time might be longer. If you want to participate in the IPO, you should make a deposit to your account as soon as possible. Otherwise, it might be too late!
Application acceptance stage is almost over.
Intial Public Offering
Trades begin