pre-IPO

Pre-IPO

An offering of shares in a company before its initial public offering (IPO). Pre-IPO offerings are available only to a limited number of individuals, and are done in advance of an expected IPO. Pre-IPO prices are generally much lower than they would be at the IPO, but are risky for the investor, as their value is contingent upon the company eventually making an IPO. This is because pre-IPO shares attract little demand in situations in which there is insufficient demand for an IPO soon after; they usually become illiquid securities.

pre-IPO

An offering of a company's shares prior to the firm's initial public offering. Investing in a pre-IPO tends to be very risky, in part because the planned IPO may never take place. In addition, shares from a pre-IPO are unregistered and are likely to be very difficult to sell until the public offering is completed.
Case Study Acting Securities and Exchange Commission chairman Laura Unger told a congressional subcommittee in July 2001 that 16 of 57 analysts reviewed by SEC staffers had invested in 39 pre-IPOs of companies they subsequently covered. In most cases shares offered in pre-IPOs are priced substantially lower than the subscription price in the subsequent IPO, meaning that many analysts who participated were able to acquire shares at very low prices. The conflict of interest is clear: analysts are likely to have a personal interest in promoting stocks they own, thus tainting the independence of their recommendations. Corporations are anxious to have analysts come on board as shareholders, in part because of the creditability analyst ownership conveys to the investing public. Analyst ownership may also result in positive investment recommendations that become a marketing campaign for the firm's stock.
References in periodicals archive ?
Like most companies that decide to take the step from private to public, Lyft (NASDAQ:LYFT) comprised a lock-up stage in its IPO terms that forbid company insiders including management, employees, and pre-IPO investors from selling their holdings for 180 days after its IPO date.
BANKING AND CREDIT NEWS-August 20, 2019--Ujjivan Small Finance Bank announces INR3.0bn capital raising through pre-IPO placement
M2 EQUITYBITES-August 20, 2019--Ujjivan Small Finance Bank announces INR3.0bn capital raising through pre-IPO placement
Global Banking News-August 20, 2019--Ujjivan Small Finance Bank announces INR3.0bn capital raising through pre-IPO placement
Additionally, he was told that Workday is replacing Oracle's (ORCL) NetSuite at "a high-profile, $300+ million, pre-IPO technology company," Walravens noted.
Led by Andrew Tarbuck, partner and head of capital markets, and Omer Khan, partner, corporate structuring, the Al Tamimi team advised Network International and its other legal advisers throughout the IPO process, particularly around a detailed pre-IPO restructuring and assisting with prospectus disclosure and regulatory compliance.
By November 2018, Airetel Africa had raised $1.25bn through the pre-IPO placement of shares in Airtel Africa to six global inves- tors including Warburg Pincus, Temasek, Singtel and Softbank Group International, and so far in 2019, it has raised another $200m from Qatar Investment Authority (QIA) as the parent gears up for competition in India.
Innovid, the world's video advertising platform, has announced it has secured USD 30 million in pre-IPO funding from Goldman Sachs' Private Capital Investing group, the company said.
substance of the pre-IPO owners' interests in the Up-C structure,
The Company completed its initial public offering on May 1, 2018, and the results detailed below reflect the pre-IPO entities, except where noted.
Jersey-based firms VG and Ward Yates acted in partnership with the Dubai office of Dentons to advise Virgin Mobile Middle East and Africa (VMMEA) on the issuance of a $30 million pre-IPO exchangeable senior secured Sukuk
Dentons has advised Virgin Mobile Middle East and Africa (VMMEA), on the issuance of its $30 million pre-IPO exchangeable senior secured Sukuk, which was privately placed.