All about IPOs, Why participate in an IPO? Participating in an Initial Public Offering, represented by the acronym “IPO”, is almost a stock market investment like any other. This implies accepting the risk inherent in acquiring a fraction of the capital of a listed company.
You become part of an adventure that, depending on how the company is managed, may be rewarding or you lose part of your stake. The time of the technological bubble of the late 1990s, when IPOs were systematically synonymous with rapid capital gains, is over. Generally speaking, it is better not to consider an introduction as an operation to safely achieve significant added value in a very short time – even if it can happen – but rather to consider it as an investment of means. or long term. In this context, supporting the start of the stock market of companies with strong economic models, well positioned on buoyant markets, can thus be extremely rewarding. For example, Iliad has seen its share price multiplied by more than 10 since its IPO in 2004. Closer to home, the company Carmat, which has designed a revolutionary artificial heart, is trading at more than 100 euros, against less than 20 euros on its stock market in the summer of 2010. Precautions to take: As for companies already listed, it is strongly recommended to carry out a detailed analysis of the company. This can be based on the basic document, whose registration by the French Financial Markets Authority (AMF) marks the first step in any IPO project. In this document, which can be consulted on the AMF website, the company describes its activities, its financial situation, its results, its strategy, its outlook, and the various risk factors (competition, regulatory, legal, financial, etc.). ) that she may be confronted with. As beautiful as the prospects of a company that is introduced on the stock market, we must also ensure that they are not overvalued at the time of introduction and be wary of operations (too) expected. The case of Facebook, introduced on May 18, 2012 at 38 dollars – a valuation of more than 100 billion dollars – and worth less than 25 dollars a year later, is in this respect emblematic.