Launching an Initial Public Offering

Zoe: What are you looking at?

Midas: It’s the Prospectus for Boogle’s IPO. I wish I could Get in on the Initial public offering, but since I can’t, I’ll buy stock as soon as the company becomes Publicly traded.

Zoe: I’m not really familiar with how the Stock market works. You mean you’re going to buy Shares in Boogle?

Midas: That’s right. An IPO is a way for a Privately owned company to become a publicly owned one. The owners of the company do it To raise capital, or sometimes it’s for Early investors to cash in.

Zoe: Why can’t you buy stock in the initial public offering?

Midas: A company like Boogle works with an Underwriter, like a major Investment bank, to help set the Share price and to find buyers for the initial offering.

Zoe: Okay, I’m following you so far.

Midas: Well, that first sale of stock is usually done In bulk, and I don’t have a few million dollars Lying around to buy that much stock. Luckily for me, those first buyers then Turn around and sell that stock in smaller amounts.

Zoe: And that’s when you’ll buy.

Midas: That’s right. You should get in on it, too.

Zoe: You mean buy some Boogle stock?

Midas: Sure, why not?

Zoe: And risk Losing my shirt? No, thanks!

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