After-Market Performance
Categories: Trading, Charts, Metrics, Financial Theory
When a company's board of directors decides it needs to raise money, it allows individuals to invest in the company by selling shares of stock. This is called the initial public offering (IPO), and it is usually greeted with much fanfare, juggling, and galaxy-wide celebrations originating with the company's board of directors. How the stock performs after the IPO is called after-market performance.
If the stock market were a middle school dance, the IPO would be the excitement experienced when a boy decides to ask a girl to dance. The after-market performance would include all the awkward seconds, sweaty palms, and thinking of things to say once the boy arrives. Although the IPO is necessary, it's what happens afterward that determines the ultimate outcome.
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Finance: What is an IPO?25 Views
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both well actually most people just spell it out I
po It stands for initial public offering In the three
words tell the story and i pl refers to a
company who's raising money by selling shares of itself to
the public for the first time a maiden voyage in
public funding if you will Whatever dot com has forty
million shares outstanding after three private rounds with venture capitalists
and private investors it wants to raise money to go
big internationally And for the first time it will offer
shares to joe and jill public And that means that
all of it shares will be tradable publicly on the
open market like on nasdaq or the new york stock
exchange That is the insiders early investors founders et cetera
will be able to just call their broker at schwab
or fidelity or wherever and sell their shares get liquid
and buy themselves a maserati because it's not what everyone
does after a nice meal So whatever dot com sells
ten million shares a twelve bucks each to raise one
hundred twenty million dollars which they can spend to build
out offices all over the world So yeah that's an
ai po and that's Why a company generally wants to
make shares available to the public because once you've made
an initial public offering and you make money off the
sales of your stock you khun by as many hippos
as you like and just remember to feed them three
times a day they get Cranky if they go too 00:01:35.158 --> [endTime] long in between No