How Do IPOs Launch?
An IPO will need to be signed off by the Financial Conduct Authority (in the UK), or your national equivalent. The company will specify how many shares are for sale, and the share price – e.g. 200 million shares at £20 a share means the company is valued at £4 billion. The IPO will launch on the day of its public listing, and close on the date specified, or earlier if demand is high.
Where Can I Buy IPO Stock?
To buy an IPO, you will need to know a broker with direct access to that company or IPO. As that company will want to raise capital, it will traditionally offer shares to institutions and set investors. This is called the primary market – the first time a company goes public. You can subscribe to an IPO before it launches, to register your interest.
What Happens After The IPO?
After the IPO has launched on the primary market and obtained investors, it will open on the secondary market. The primary market does not come with a guarantee of stock allocation, while the secondary market is open to the public. As long as you can pay for the share price, you can bid.
How Easy Is It To Buy IPO Stock?
It is very hard for investors to purchase IPO stock on the primary market. This is largely because the company will only accept select investors to raise capital, and the secondary market comes after the share prices and initial investors have been agreed.