Seven questions to ask before you invest in that IPO
At some point, your friendly local stockbroker may present you with the opportunity to invest in an IPO (initial public offering). (In an IPO, a company raises capital by selling shares to investors. When you buy a stock in the secondary market, you’re buying it from another investor. In an IPO, the cash you pay goes to the company.) You’ve probably heard about the IPOs that see a surge in the share price on the first day of trading (like Alibaba, when its shares jumped by 36 percent on the first day of trading when the company went public in September 2014). But that happens rarely – and should not be a reason to invest in an IPO. Some big IPO action So far this year, there have been 772 initial public offerings. That’s the most since 2007. These offerings have raised a total of US$83.4 billion, which is up 90 percent from the same period last year. And the Asia-Pacific region is leading the charge. There have been 468 IPOs in this region (with US$37 billion raised) this year. Meanwhile, the second half of 2017 will see some big offerings. Two Chinese companies, China Tower Corp and Sinopec Marketing
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