Initial public offerings (IPOs) were long the well-kept secret of Wall Street insiders. Individual investors didn’t take notice of IPOs until the spring of 1996, when Yahoo announced that they were going public. They went on to price at $13 a share, and rocket up 154% to $33 a share.
Yahoo captured the attention of individual investors because it was the first mainstream internet company to go public. After that, investor interest in IPOs erupted.
Today, the hype of IPOs can be seen most prominently with IPO unicorns. Unicorns are startup companies that have private valuations of more than $1 billion, namely AirBnb, Uber and SpaceX.
Will these companies go public via an IPO, a direct listing like Spotify or will they stay private? Are these companies over or undervalued? Will these startup founders make millions overnight?
This crash course in IPOs will get you up to speed on what they are, how to evaluate them and when to invest in them.
