Page 95 - Initial Public Offering - An Introduction to IPO on Wall Street

Public corporations must retain sufficient accounting staff, assisted by legal counsel and
professional independent auditors, to satisfy the different reporting standards placed on them.

6/30/x1 Fiscal year 20x1 second quarter-end
7/17/x1 The effective date of registration statement—
company becomes a reporting company
8/31/x1 (1) Second-quarter Form 10-Q due (unless
6/30/x1 financials are included and discussed
in a registration statement)
9/30/x1 Fiscal year 20x1 third quarter ended
11/15/x1 Third-quarter Form 10-Q due
12/31/x1 Fiscal year 20x1 year-end
3/01/x2 (2) Initiate proxy search
3/15/x2 File Preliminary Proxy Statement and form
of Proxy with the SEC and FINRA, if needed
3/31/x2 Fiscal year 20x1 Form 10-K due
3/31/x2 Fiscal year 20x2 first quarter-end
4/02/x2 (2) Record date—Annual Meeting of
Shareholders
4/16/x2 (2) File Definitive Proxy Statement, Form of
Proxy and Annual Report to Shareholders
4/16/x2 (2) Mail Definitive Proxy Statement, Form of
Proxy, and Annual Report to Shareholders
5/15/x2 First-quarter Form 10-Q due
5/30/x2 Annual Meeting of Shareholders
7/16/x2 Section 11(a) Earnings Statement, which
shall be made accessible to security holders
as quickly as practicable and shall cover a
minimum of 12 months from the effective
date of the registration statement.

Maintain Investor Enthusiasm
When an entity is public, tremendous effort must be spent to protect its market place. Trading
will decrease if investor interest in a business is not sustained.

If the shares of an organization are lightly traded, it would not know the benefits pursued from
the IPO (such as liquidity via a potential secondary offering). Thus, after the IPO, effective
distribution and protection of the stock, as well as the ongoing interest of security analysts, is
important.

With the help of a financial public relations company, a plan for aftermarket aid can be
developed. Typically, this method involves selecting a person within the organization to
manage shareholder relationships as well as support from an external company. This helps to
make sure the release of consistent and correct details.

As viewed by the market, an organization’s success is expressed in the valuation of its stock.
Management is faced with the challenge to balance short-term efficiency with long-term
objectives. Adverse developments can negatively impact the value of the stock, such as the
issuance of lower-than-expected earnings.

Page 95