Warning

Info

Warning

Info

Warning

Info

LSDefine

Simple English definitions for legal terms

initial public offering (IPO)

Read a random definition: incendiary

A quick definition of initial public offering (IPO):

An IPO is when a private company decides to sell its shares to the public for the first time. Before an IPO, the company is private and doesn't have to share information about its operations. But by going public, the company can raise more money by selling shares on public exchanges like the NYSE. To do this, the company has to file a registration statement with the Securities and Exchange Commission (SEC) and follow strict rules to prevent fraud. Once the SEC approves the registration statement, the company can sell its shares to the public without restrictions.

A more thorough explanation:

An initial public offering (IPO) is when a private company decides to sell its securities to the public for the first time. Before an IPO, a company is considered private and does not have to disclose information about its operations. However, it also faces restrictions on whom it can sell its securities to. Private companies can sell securities in private placements but cannot sell securities on public exchanges, which limits their ability to raise capital.

When a company conducts an IPO, it becomes a public company and can sell securities to public investors. However, to prevent securities fraud, the Securities Act and SEC Rules regulate the IPO process. The primary event in an IPO is when the issuer files a Form S-1, which is the most common registration statement used for IPOs. The registration statement contains the bulk of the quantitative and qualitative disclosures to investors.

During the IPO process, the issuer must follow strict regulations on how it can communicate with and act towards investors. For example, during the pre-filing period, the issuer cannot make any "offer" to sell securities, which includes all communications that may condition the market for the sale of the securities. During the waiting period, the issuer and underwriter begin to gauge market interest, and the SEC reviews the S-1. Once the SEC approves the issuer's S-1, then they are in the post-effective period and may sell their security without restriction.

Company XYZ has been operating as a private company for several years and wants to raise capital to expand its operations. It decides to conduct an IPO and files a Form S-1 with the SEC. During the waiting period, Company XYZ conducts roadshows to gauge market interest and communicates with potential investors. Once the SEC approves the S-1, Company XYZ becomes a public company and can sell its securities to the public.

This example illustrates how a private company can become a public company by conducting an IPO and selling its securities to the public. It also shows how the IPO process is regulated to prevent securities fraud and ensure that investors have access to accurate information about the company.

initial appearance | injunction

Warning

Info

General

General chat about the legal profession.
main_chatroom
👍 Chat vibe: 0 👎
Help us make LSD better!
Tell us what's important to you
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
LSD+ is ad-free, with DMs, discounts, case briefs & more.