Companies need to raise money in order to grow their business. To do this, they have two options:
- They can borrow from banks.
- They can recruit money from the public through day trading live.
The disadvantage in obtaining a bank loan is that the loan must be repaid. By going “public,” a company can raise funds without taking a loan from a bank. This is done by offering shares of stock to the public in an initial public offering, or IPO.
What is an Initial Public Offering – IPO?
An IPO is an event in which a company begins selling shares of its stock to the public day traders for day trading live in return for the public’s money. And what is a share of stock? It’s a type of security that gives its owner-the day trader- the right to a share of the company’s assets and earnings. When a company offers shares to the public, it is selling part of its stock to day traders.
If the company invests the money wisely, it will begin to accumulate contracts, patents, income, and profit. This will cause the company’s value to increase, and the value of its shares will rise accordingly. Buyers of IPO shares believe that they are purchasing them cheaply, and they hope that the shares will sell for more in the future. From this point on, the shares will be actively traded between buyers and sellers. To protect the interests of both buyers and sellers, and to improve reliability and create greater fluidity, the stock is traded within the controlled environment of the stock exchange. Day trading stock picks are announced regularly depending on the fluctuation of the market.
Can any Company Sell Shares in an Initial Public Offering – IPO?
Not just any company can sell IPO shares and become a public company. Instead, a company wishing to recruit money through the stock exchange must meet tough criteria related to sales turnover, profits, and financial stability. And not every company needing money is interested in going public and day trading live because, after making the offering, it will need to continue upholding tough regulatory standards that may limit its progress. A public company will be required to become transparent, which sometimes exposes its secrets to competitors. A public company also will be required to include shareholders (the day traders) in its decision-making processes.
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