Initial Public Offering Process

Summary

This practice note discusses initial public offerings (IPOs), including: (1) an overview of IPOs and considerations for becoming a public company, (2) the parties in an IPO and their roles, (3) how to prepare a client for an IPO, and (4) an overview of the IPO process, including the processes for (a) due diligence, (b) underwriting, (c) sales and distribution, and (d) closing. In an IPO, a company offers and sells its securities, usually common stock, to the public for the first time in an offering registered with the Securities and Exchange Commission (SEC) and usually lists the securities on a national stock exchange such as the New York Stock Exchange, or one of the Nasdaq stock markets. Companies considering an IPO need to understand the legal requirements and implications of becoming public so that they can weigh the benefits and costs of being a public company before committing the time and resources required to conduct an IPO.