An initial public offering (IPO) is when a private company becomes public. This involves listing the firm on a stock exchange and releasing its shares into the wild for the first time, allowing retail investors to invest.
Check out our IPO calendar below to find out more about highly anticipated and rumoured upcoming IPOs. If you want to learn more about the process, we’ve also included plenty of in-depth details covering the nuts and bolts of how this all works.
Klarna, a buy-now-pay-later tech company was thought to be preparing for an IPO in 2022. The company was founded in 2005 and operates in 17 countries, including the US and UK. It was recently valued at $46 billion (about £35 billion).
Rumors that TikTok may go public persist, but the latest move by its parent company, ByteDance, suggests that we may see that company stage an IPO first. ByteDance hired a CFO on 24 March 2021 in what reportedly is a move toward a public offering.
Israeli multi-asset brokerage company eToro is expected to go public. Few details are available, but eToro is reportedly in talks with Goldman Sachs Group to lead the offering. The company may also be exploring a SPAC merger as a means to list on the Nasdaq.
| Name | Estimated date | Read more |
|---|---|---|
| The London Tunnels | January 2024 | Learn more |
| Discord | 2024 | Learn more |
| Klarna | 2024 | Learn more |
| Shein | 2024 | Learn more |
| Zopa | 2024 | Learn more |
| Company | Status | Category | Find out more |
|---|---|---|---|
| Stripe | Rumour | Finance | Learn more |
| Discord | Rumour | Tech | Learn more |
| Rumour | Finance | Learn more | |
| SpaceX | Rumour | Tech | Learn more |
| Vue Cinema | Rumour | Entertainment | Learn more |
| Starlink | Rumour | Space | Learn more |
| Monzo | Rumour | Finance | Learn more |
| Revolut | Rumour | Finance | Learn more |
| Starling | Rumour | Finance | Learn more |
An IPO is a process where a private company sells shares to public investors for the first time and lists on a stock exchange.
The main reason a company would have an IPO or “go public” in this way is to raise money by selling its shares. The money raised can help the company expand its business further and pay back anyone who’s helped fund it up until that point.
There are plenty of IPO benefits for companies, but mainly it’s about raising capital and positive publicity.
The key purpose of an IPO is to raise capital quickly and efficiently for the business, extracting money from an untapped market, the public. By issuing shares to a larger number of investors, a company can use this cash to grow the business.
Publicity is another major benefit of an IPO. Lesser-known companies can steal the limelight for a few days or week, which helps increase business opportunities. For example, a publicly listed company comes with a degree of prestige and pedigree. This can also help people attract top talent to the business to help fuel growth.
IPOs aren’t as easy as deciding you want to do one. There are several reasons why companies don’t choose to float on a stock exchange.
An IPO can often take six to nine months, but it could end up being much longer. During that period, the company’s management team will have to devote a lot of time to the process, depriving them of the time they need to focus on the business.
Similarly, an IPO costs a lot of money. Companies consult with underwriters and financial experts, which comes with a hefty price tag. On top of that, once a company is public, it has additional admin duties to fulfil (such as accounting, reporting, and generating more documents to disclose how the business is being run). All of that costs money and resources.
Part and parcel of going public includes being answerable to shareholders. If shareholders hold a big portion of ownership, they can dispute and challenge management choices and decisions. Shareholders can also vote to remove managers and senior staff. Under pressure to perform for the shareholders, many businesses end up making poor decisions, focusing on short-term wins.
A recent example of an IPO is Arm (ARM), which went public on 14 September 2023. Arm’s initial price range was between $47 and $51 per share, eventually listing at the upper end due to positive interest pre-IPO. This gave Arm an initial valuation of $54.5 billion.
The stock was listed on the Nasdaq stock exchange in the US (even though the company is based in the UK). Japanese investment firm, SoftBank still owns around 90% of the chipmaker. Arm shares were met with initial positivity, opening officially at just over $56 and went on to increase by over 25% in the first day. However, in the time since, the shares fell back down towards the original IPO price. We’ll have to wait and see how things play out in the long term for Arm stock.
When starting out, a company is privately owned. It usually starts with a small number of shareholders, often including the founders’ close circle along with early backers and investors.
When the company is at the stage that it wants to “go public”, it starts the process of filing for an IPO. It might choose to make a public announcement of its plans and it starts to advertise to underwriters.
An underwriter prices the shares of the company and the existing shares of the company are converted into public ownership at the new value. The company needs to ensure it meets the requirements for public companies, often needing to appoint a board of directors.
On the decided IPO date, the company issues its shares.
Usually, the initial share price offered by the company is reasonable, and based on the latest reported financials. But investors buying shares around the IPO date should expect volatility in the share price immediately after the stock is floated on an exchange.
Most investors who choose to invest in an IPO do so because of the potential opportunity to get in relatively early. The added risk means potentially a higher investment return, but also a greater potential for losses.
Factors that determine the valuation of an IPO include:
IPOs are an exciting step in the evolution of a company, but they can also be a riskier time to invest as the market attempts to fairly price a firm. This uncertainty can lead to greater rewards, but there are plenty of stocks that have flopped after its IPO.
It’s important to try and treat a stock that’s just become publicly listed as you would any other investment. Do plenty of research to make sure it’s a business you want to invest in, ensure the finances are heading in the right direction, and don’t buy shares if you’re unwilling to take on a hefty slice of risk.
If you’re keen on investing in a company soon after its IPO, you’re going to need an investment account. Compare the UK’s leading brands below.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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