Before we jump in and begin modeling, let's first discuss what an IPO, or initial public offering, is, and what research tells us about this market. After that, we'll discuss a number of strategies that we can apply.
The IPO market
What is an IPO?
An IPO is the process whereby a private company becomes a public company. Public offerings raise capital for the company and give the general public an opportunity to invest in the company by buying its shares.
Though there are variations in how this occurs, in a typical offering, a company enlists the help of one or more investment banks to underwrite their offering. This means that the banks make a guarantee to the company that they will purchase all of the shares being...
