IPO discount to individual investors?
Most IPOs are issued at a discount to Institutional investors at a discount during Private Placements, is the same thing done for individual investors? I have never seen it but want to do it for our investors in the IPO we are doing very soon.
2nd question: is it a good idea to have my IPO open in December? If I start in October? Or should I just wait for next year? If so when is the most opportune time? Mid February?
What?
Are you asking if the IPO price is different for an institutional investor vs. an individual investor? The IPO price is an IPO price.
There is often an allotment for employees, families and friends of the company to invest - would not be a different price than the IPO price.
You should consult your banker about services to manage these accounts for those that may not have the ability to manage this on their own (introduction to PWM groups, for example), as well as about timing for your IPO.
So the roadshow is done at the Private Placement stage while the IPO is just public marketing?
Are you doing a private placement or an IPO? If you do a PP at a much lower valuation than you go to the public market with it will raise questions with investors and you will likely not have a successful deal...I don't quite understand what you are asking.
Typically when an IPO prices there is an implied discount to the fair value that the IPO price is set with - a perfect IPO will trade up 10-15% on its first day of trading, which you can point to as that discounted price. It is the IPO price nonetheless.
Trying to issue shares at a much lower value just before an IPO is a recipe for disaster and you will need to wait a while before you go public unless you can point to material growth from the investments from the PP, otherwise its not only a bad sign to the investors that you are overvaluing your company, but its also unethical.
During the PP, some institutional investors ask for a discount reflect both the riskiness since this is a venture company as well as the less liquidity in the exchange.
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