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Initial Public Offering Article
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Initial Public Offering Made Netscape an Internet Browser Giant
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IPO.
Single acronym, yet with different meanings and applications.
It may stand for intellectual property ownership. It may also stand for the Instituto Portugues de Oncologia or the Portuguese Oncology Institute which is situated at the University of Porto in Portugal. It may probably refer to the Israel Philharmonic Orchestra which is one of the leading symphonic orchestra in Israel and one of the best-performing orchestra around the world.
However, when you are talking about the IPO in the world of finance, it only spells three distinctive words.
Initial public offering.
Initial public offering or referred to by its acronym IPO, is basically the first sale of a company’s common stocks to the public, which is why it is called “company that will go on public”. One of the major reasons why companies go on public is to raise additional capital that will be used to sustain their operational expenses. Although companies undergoing the IPO process must adhere to the heavy legal requirements imposed by the governing laws and authorities, IPO is considered to be an effective method in raising additional capital for a company.
Typically, an IPO process involves several investment banks that will act as the underwriters for the deal. The company will enter an agreement with a lead underwriter that will facilitate the public issuance of their common shares to the public. The issuer (or the company issuing the common shares) must draft a prospectus that will show the details of the company’s background, history, products, operations, industry environment, and other related factors.
Such prospectus will be submitted to the U.S. Securities and Exchange Commission (SEC) for approval. Once approved, the price of the common shares will be finalized, and the IPO will now be on the “free riding period” wherein the shares will be offered to the public in different ways.
In most cases, newly-formed and not well-known companies are the ones involved in the IPO process. However, there are large corporate organizations that go on public to further raise funds to sustain their growing business operation. One of which is the Netscape.
Netscape, or formerly known as the Netscape Communications Corporation, is an American-founded computer application company, which is best known for their Internet-browsing products and services. The Netscape browser was dominant before in terms of usage share. However, with the competition among different browsers, Netscape have lost their user base within that particular area. As a result, the usage share of Netscape browsers is now under 1 percent and still falling slowly.
Netscape went public for the first time in April 1994. They have filed before the Securities and Exchange Commission for an initial public offering of 3.5 million shares of common stocks to the public. After the completion of the IPO process, Netscape were able to grow faster than any other existing software company in terms of revenues. Their initial market value was now around $ 1 billion against the $200 or $300 million of other computer application companies. In addition, they have enough cash to pay for their additional expenditures.
Netscape existed as an independent company from 1994 up to 2003 before they became the subsidiary of the America On Line (AOL). However, the Netscape brand is still in use.
Although the Netscape is now a subsidiary of another large Internet-based company, it showed that through IPO, additional capital to pay for additional expenses and increased market value is a possibility.
Initial Public Offering Specific links
Initial Public Offering News
Grand Canyon Education, Inc. Announces Pricing of Initial Public ... - MarketWatch
 The Money Times | Grand Canyon Education, Inc. Announces Pricing of Initial Public ... MarketWatch - PHOENIX, Nov 20, 2008 /PRNewswire-FirstCall via COMTEX/ -- Grand Canyon Education, Inc. today announced the initial public offering of 10500000 shares of ... Grand Canyon breaks US IPO drought Grand Canyon Education stumbles in market debut IPO VIEW-End of one IPO drought, start of new one? |
Pansoft Company Limited Announces Third Quarter 2008 Results and ... - MarketWatch
Pansoft Company Limited Announces Third Quarter 2008 Results and ... MarketWatch - The increase in operating expenses was primarily due to (1) an increase in administrative expenses related to the Company's initial public offering to list ... |
Target rejects Pershing's real estate proposal - Reuters
Target rejects Pershing's real estate proposal Reuters - He proposed on Wednesday that Target spin off 20 percent of the REIT in an initial public offering and use the money from the public offering to pay down ... Target says it won't pursue Pershing Square deal |
Argentine Stocks Fall as Biggest Shareholders Seized (Update5) - Bloomberg
Argentine Stocks Fall as Biggest Shareholders Seized (Update5) Bloomberg - His company, which raised about $100 million in an initial public offering in May, probably will be the last IPO for “a long time,” he said. |
The Brualdi Law Firm, PC Announces Class Action Lawsuit Against ... - MarketWatch
The Brualdi Law Firm, PC Announces Class Action Lawsuit Against ... MarketWatch - ... to accelerate the recognition of revenues, had been part of a scheme to defraud investors since the Company's initial public offering in October 2005. ... |