Page 10 - Initial Public Offering - An Introduction to IPO on Wall Street
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8.1.2 The Different Types of Stocks Issued .......................................................................... 149
8.1.3 Issuing Stocks as an Exit Strategy ............................................................................... 150
8.2 Investment Banker .............................................................................................................. 150
8.2.1 Investment Banker’s Role in an IPO ............................................................................... 151
Underwriting ............................................................................................................................. 151
Road Show ................................................................................................................................ 151
Lock-Up Period ......................................................................................................................... 151
Pricing ....................................................................................................................................... 151
8.2.2 The Factors to Consider When Selecting an Investment Bank for an IPO ...................... 151
Interest Level ............................................................................................................................ 152
Experience................................................................................................................................. 152
Sales Capability ........................................................................................................................ 152
Ability to Make the Market....................................................................................................... 152
Industry Knowledge .................................................................................................................. 152
Research and Analysis .............................................................................................................. 152
8.3 Investors .............................................................................................................................. 152
8.3.1 Little Guy ..................................................................................................................... 153
8.3.2 Qualified Investor ........................................................................................................ 154
8.3.3 Accredited Investor ...................................................................................................... 155
8.3.4 Sophisticated Investor .................................................................................................. 155
8.3.5 Institutional Investor .................................................................................................... 156
Types of Intuitional Investors ................................................................................................... 156
Characteristics of Institutional Investors .................................................................................. 156
Risks in Institutional Investing ................................................................................................. 157
Impact of Institutional Investors ............................................................................................... 157
8.4 Securities & Exchange Commission ................................................................................... 158
8.5 Securities Market ................................................................................................................ 159
8.5.1 Organized Exchanges ................................................................................................... 159
8.5.2 OTC Markets ............................................................................................................... 160
9. Due Diligence ............................................................................................................160
9.1 What is Pre-IPO Due-Diligence? ........................................................................................ 160
9.1.1 The Importance of IPO Due-Diligence ........................................................................ 160
9.1.2 People Involved in IPO Due-Diligence ........................................................................... 161
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