The amount of stock in an initial public offering (IPO) that is sold to a customer.
Assets Under Management ( AUM)
The total market value of the investments that a person manages on their Investment account.
Money available within a brokerage account for the purchase of securities. The components of buying power include settled cash, cash from recent transactions that have not yet settled, incoming wires and any instant funding from pending ACH deposits.
Cooling Off Period
Refers to a time period between the filing of the registration statement with the Securities and Exchange Commission (SEC) and the offer of those securities to the public. During this period, the underwriters and selling group can distribute notifications announcing the new issue, send preliminary prospectuses to qualified investors for review, and take indications of interest from customers.
Flipping is the ability to sell securities obtained during an IPO at any time. A flipper is an investor who has acquired shares of an IPO at its offering price and sells it immediately.
Indication of Interest
A conditional, non-binding expression of interest by an investor, in buying a security that is currently awaiting regulatory approval.
In the case of IPO Investing, this refers to the individual/entity engaged in purchasing shares.
The company issuing the new securities is known as the issuer. In a traditional IPO, issuers raise capital by selling common shares to investors. The issuer enters into a contract with a lead underwriter to sell its shares to the public. The underwriter then approaches investors with offers to sell those shares.
A new issue refers to a stock or bond offering that is made for the first time. Most new issues come from privately held companies that become public, presenting investors with new opportunities.
The pre-initial offering is the first stage in an IPO life cycle is a restructuring phase and allows a private company to raise funds in advance of its listing on a public stock exchange.
The second stage in an IPO life cycle is the transaction in which a person that beneficially owns, directly or indirectly, a majority of the interests of the company places its shares on a listed exchange as part of an initial public offering.
The final stage in an IPO life cycle involves the execution of the promises and business strategies the company committed to in the preceding stages.
This is an offering document printed by the issuer containing a description of the business, discussion of strategy, presentation of historical financial statements, explanation of recent financial results, management and their backgrounds and ownership; the preliminary prospectus has red lettering down the left-hand side of the front cover and is sometimes called the “red herring”.
The Final Prospectus, is printed after the deal has been made effective and can be offered for sale; it contains the information not available in preliminary prospectus, such as number of shares issued and the offering price
SPAC IPO - Issuer
In a traditional IPO, issuers raise capital by selling common shares to investors. For a SPAC IPO, the issuer determines if the unit split will be mandatory for all unitholders or if it will be voluntary.
SPAC IPO - Units
Unlike traditional IPOs where issuers raise capital by selling common shares to investors, SPAC IPOs are issued in units. Units typically consist of ONE Class A common share and a fraction of a warrant (often in ½, ⅓ or ¼ increments).
Comprises all financial institutions involved in selling or marketing, a new issue or secondary issue of shares. The selling group helps with the underwriting but may not be directly involved in the process.
The person/entity (e.g.: investment bank) responsible for creating the financial terms of an IPO. Underwriters help the company determine the type of securities to issue, the number of shares, how the offering prices for shares will be priced, when they will begin trading, and any other relevant details for the market offering.
A warrant gives holders the right to purchase more shares at a set price on a later date. Given as additional compensation to pre-listing SPAC IPO Investors for agreeing to have their capital held in a trust until the merger.