A bank or group of banks put up the money to fund the IPO and ‘buys’ the shares of the company before they are actually listed on a stock exchange.
The banks make their profit on the difference in price between what they paid before the IPO and when the shares are officially offered to the public.
Is IPO a good investment?
Investment in IPOs is a good idea but to invest in every single IPO may not be one. After all, the course of every single IPO is different. Initial Public Offerings present a convenient platform, especially for beginner investors. This is a good opportunity for them to make an entry into the market at feasible rates.
How long after IPO can you sell?
Can we sell IPO shares immediately?
The Selling Process
Quick sellers of post-IPO shares are known as “flippers.” Their goal is to make a quick profit, usually selling their shares within a few days of purchase. Your IPO stock shares reside in your brokerage account, and you can sell some or all of them at any time.
What happens after an IPO?
An IPO, or initial public offering, is the beginning of a company’s life as a public company, not the end. After the IPO, investors buy and sell shares of a company. If the stock is in demand, if a lot of people want to buy it, the price will go up. If no one wants what they’re selling, then the price will go down.