Frequently Asked Questions About IPOs

An Initial Public Offering (IPO) is the first time that the stock of a private company is offered to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but they can also be done by large privately owned companies looking to become publicly traded. In an IPO, the issuer obtains the assistance of an Underwriting firm, which helps determine what type of security to issue, the best offering price, the amount of shares to be issued and the time to bring it to market.

An IPO is also referred to as a Public Offering. When a company initiates the IPO process, a very specific set of events occurs. The chosen Underwriters facilitate all of these steps.

  • An external IPO team is formed, consisting of an underwriter, lawyers, certified public accountants (CPAs) and Securities and Exchange Commission (SEC) experts.
  • Information regarding the company is compiled, including financial performance and expected future operations. This becomes part of the company prospectus, which is circulated for review.
  • The financial statements are submitted for official audit.
  • The company files its prospectus with the SEC and sets a date for the offering.

ClickIPO is a mobile-based IPO and Secondary Offering order entry platform and research tool designed for retail investors. We make it easy for retail investors at any Broker-Dealer to purchase any offering. We then aggregate retail investor orders by placing one order with the underwriter. We then receive an allocation from the underwriter that we use to fill investor orders based on their Investor Score.

The Investor Score is an internal score at ClickIPO that works like a FICO score. Holding shares for 30 days or more and participating in multiple offerings increases your investor score which increases your allocations.

A Secondary or Follow-on Offering is when an already public company registers additional shares for sale. The shares could be newly issued by the company to raise additional capital or a sale by an existing shareholder. After the market closes, the secondary offering is announced and is typically priced below the closing price of the stock to ceate an incentive for investors.

Click IPO will notify you immediately and give you a short period of time, 60-90 minutes to place an order. If you recieve any shares, they will be allocated to you, and appear in your account before the market opens the next morning.

From 2010-2015, there were on average 450 IPO and Secondary Offerings in the USA alone.
All investors have different strategies and we do not make any investment recomendations. However, an IPO is an opportunity to make a ground floor investment at the initial public price which is attractive to investors if they like the long term prospects of the company and think the share price will rise.
Investment banks that underwrite IPOs have been eliminating their retail brokers along with their smaller customers for many years. Working with Retail Investors externally has proven to be very difficult and expensive for Investment Banks. Since their has not been a viable way, until now, to allocate shares to retail investors, most of the retail allocation for IPOs has been going to professional IPO flippers. These flippers will sell IPO shares within days or even minutes of the Offering going public, which causes downward pressure on the share price. ClickIPO has created a viable technology solution to allocate shares to retail investors that promotes a buy and hold strategy, eliminating flippers from the process.
You could be allocated the entire dollar amount of your order, part of your order, or none of your order. Your allocation depends on your investor score, how much interest there is in a specific offering, and how much of the offering is allocated to ClickIPO.
All you pay for is the share price of the IPO. There is a commission built into the share price, but it is paid by the issuer, not you. Essentially, the purchase is commission free to you.
We take orders in dollars because the final price of the offering could be above or below the price range. Your allocation will be in shares. Regardless of the final price, you will not be allocated more shares than the total dollar amount of your order.
If an IPO is priced below the low end of the price range in the prospectus, we will notify you and ask you to reconfirm your order. If you do not reconfirm your order, your order will be canceled.
If an offering prices up to 19% above the high end of the price range, your conditional purchase order will still be valid.
If an offering prices 20% above the high end of the price range, we will send you a notice and you will have 60-90 minutes to reconfirm your order. If your order is not reconfirmed, it will be canceled. Offerings that price 20% above the range or more are over subscribed, meaning demand is high. This is one reason to always look at any ClickIPO messages or alerts because you don’t want to miss out on one of these IPOs.
The price range of an offering is usually in $2 increments ($18-$20 as an example). The Underwriters and Issuers believe the company is worth a price per share in this range. Institutional Investors place orders usually within this range, but sometimes above or below the range. Once the underwriters have enough institutional orders, they will agree on a final offering price per share with the issuer, usually within the range. Be prepared for offerings priced above or below the range, this does happen, but not very often. The price range is just a guide.
The price range of an offering is usually in $2 increments ($18-$20 as an example). The Underwriters and Issuers believe the company is worth a price per share in this range. Institutional Investors place orders usually within this range, but sometimes above or below the range. Once the underwriters have enough institutional orders, they will agree on a final offering price per share with the issuer, usually within the range. Be prepared for offerings priced above or below the range, this does happen, but not very often. The price range is just a guide.