NEWSWIRE - November 12, 2001
Topic: Common Stock and the Investment Banking Process
Source: "IPO Business Picks Up in Postattack Rally,"
by Kate Kelly, The Wall Street Journal, Monday, November
12, 2001, page C1.
Synopsis: In 1999 and 2000 the IPO market was hot.
Many firms, mostly in the high-tech sector, were able to raise
significant capital by selling stock to eager investors. It
was not uncommon for these stocks to double in value during
their first day of trading. However, as markets have cooled
and declined significantly, the IPO market has slowed. The
3rd quarter of 2001 was
the slowest for IPOs since 1976. This article documents the
resurgence in IPOs in recent weeks
and discusses the improved market for new firms trying to
go public during the upcoming months.
Discussion Questions:
- What is an IPO? What other sources of financing are available
to nonpublic firms?
- Contrast the IPO market two years ago with the current
market
- From an investor's perspective, what are some important
issues to resolve before purchasing stock in a firm going
public?
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