An IPO is an acronym that stands for ‘initial public offering’. IPOs represent the first time that an organization sells shares of stock on the public market. IPOs are typically used by organizations to raise capital, but can also be used to increase exposure, gain notoriety, and increase liquidity. Many times organizations that file for IPOs are small, but large private organizations can also file for IPOs.
In today’s complex business environment, high potential fast growth start-ups seem to find capital without the need for filing an IPO. Many of these organizations have been called ‘Death Star IPOs’. Death Star IPOs are highly anticipated IPOs with significant upside potential. Some companies that fit the profile of Death Star IPOs include Google, Yahoo, LinkedIn, and Pandora. Facebook could also become a Death Star IPO, although some investors think that ship has sailed.
How can you cash-in on IPO mania? Pay close attention to highly anticipated IPOs. Look out for names of organizations that seem to get a lot of media attention. It is also important to pay attention to the fundamentals of that organization. Although Death Star IPOs have strong short-term upside potential, if you’re looking for a long-term stock pick you shouldn’t just get caught up in the mania. Speculation can destroy your principle.