Initial public offering (IPO)

Share of Stocks

Initial public offering (IPO) refers to the first time a company sells its shares of stock to the public. An IPO occurs when a privately owned company issues shares of stocks to be sold to the general public. This means that the company is no longer privately owned, but is owned by many investors, most of whom are not involved with the day-to-day operations of the company. These investors simply own some of the company's stock, which they purchased on the open market or during IPO.

Reason Why

The obvious reason that any company undertakes an IPO is to raise money. Common reasons why companies need to raise money are:

  • To invest into new infrastructure or equipment
  • To expand into new regions
  • To diversify into new sectors of business
  • To pay off debts
  • As an exit strategy for current owners or investors

Advise Providor

Most countries have their own stock exchange where the shares of public-listed companies are traded. Nowadays, companies can seek cross-border listing. For example, a Chinese company can launch its IPO in NASDAQ or a Brazilian company can be listed in an offshore jurisdiction like Hong Kong or the Cayman Islands.

Although Forest has been actively involved in raising venture capital for IPO and pre-IPO companies, Forest is not an official underwriting firm for IPO. Forest provides recommendations and advice to private corporations who aim to go public on official law firms, accounting firms, underwriting investment banks, and others with which to engage and how to proceed with this engagement.

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