PRE-IPO
What is a PRE-IPO placement?
A pre-initial public offering (IPO) placement is a private sale of large blocks of shares before the stock is listed on a public exchange, the buyers in a pre-IPO placement usually get a discount from the price stated in the prospective for the IPO.
From the viewpoint of a young company, a pre-IPO placement is a way to raise money before going public. It also is a way to offset the risk that the IPO price will prove to be optimistic and the price will not go up immediately after it opens.
Not many individual investors take part in pre-IPO placements. They are generally restricted to high-net-worth individuals and sophisticated investors. The company, however, does not want these private buyers to immediately sell all their shares if their stock soars once it opens on an exchange. To prevent this, a lock-up period is generally attached to the placement, preventing the buyer from selling shares in the short-term.
An Example of Pre-IPO Placement
Pre-IPO Advantages
There are many reasons why high net worth and sophisticated investors have turned to Pre-IPO opportunities in the last few years.
- Barriers to entry have been reduced, they can invest from just a few thousand pounds.
- By investing at the earliest possible stage of the companies life, the potential for growth is highest.
- In certain circumstances investors can get the stock at a discount to its potential IPO price.
The information available through Fixed Marketing Ltd is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by Fixed Marketing Ltd and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Get In Touch
Got a Question about the Services We Offer?
We're All Ears!
