Page 8 - Initial Public Offering - An Introduction to IPO on Wall Street
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Information Presented in a Roadshow ...................................................................................... 117
After the Roadshow Completion .............................................................................................. 117
Non-Deal Roadshow ................................................................................................................. 118
IPO Roadshows in Summary .................................................................................................... 118
5.2.4 Step 4: IPO Pricing ...................................................................................................... 118
5.2.5 Step 5: Going Public .................................................................................................... 120
Overview of the Requirements for Going Public ..................................................................... 120
Bottom Line .............................................................................................................................. 121
5.2.6 Step 6: IPO Stabilization .............................................................................................. 121
Overallotment or Greenshoe Option ......................................................................................... 122
Reasons for Overallotment/Greenshoe ..................................................................................... 122
Overallotment Option Example ................................................................................................ 123
SEC Regulations on Overallotment .......................................................................................... 123
Full, Partial, and Reverse Greenshoe ........................................................................................ 123
Lock-up Period.......................................................................................................................... 124
5.2.7 Step 7: Transition to Market Competition ................................................................... 127
Metrics for Evaluating a Successful IPO Process ..................................................................... 127
6. Costs ...........................................................................................................................127
6.1 The Costs ............................................................................................................................ 128
6.1.1 Pre-IPO Direct Costs.................................................................................................... 128
Underwriter ............................................................................................................................... 128
Legal ......................................................................................................................................... 129
Auditor ...................................................................................................................................... 129
IPO Consultant .......................................................................................................................... 130
Printer ........................................................................................................................................ 130
Listing Fees ............................................................................................................................... 130
NASDAQ Global Select Market and NASDAQ Global Market .............................................. 131
Roadshow .................................................................................................................................. 131
6.1.2 Pre-IPO Indirect Costs ................................................................................................. 132
Costs of Restructuring, Including the Audit Committee Charter ............................................. 132
Costs to Make Financial Statements S-X Compliant, Valuation Services, and Reports, and
Articles of Incorporation ..................................................................................................... 132
6.1.3 Post-IPO Recurring Costs ............................................................................................ 132
New Staffing Expenses ............................................................................................................. 133
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