Questions to ask before you subscribe to an IPO

[Corsa]

Hi All

Just was reading through this article "How to set sail on a winning float" in the recent copy of Shares magazines and thought this list of questions might be of interest to others.


Questions to ask before you subscribe to IPO



(1) Do I understand the company's business and how its revenue and profits are earned?

(2) How strong is the company's market position and how high are the barriers to entry for new competitors?

(3) How do the forecase price earnings ratio and dividen yield at the offer price compare with other companies in the sector?

(4) How great are the risks that could jeopardise acheivement of prospectus forecasts?

(5) Does management have a sucessful track record in this business?

(6) Do I have confidence in the board and does at least one director have experience in this sector?

(7) Is the IPO to fund growth or to enable management to exit ist shareholding?

(8) What shareholdings will management have after the IPO?

(9) Will the company have sufficient cash after the IPO to fund its business plan?


Source: Financial & Corporation Relations (FCR)

Kind regards

Corsa

 

[Aceyducey]

This goes for before IPO when Angel Investing in a company as well!!!!

(though some questions may not apply, particularly with early stage concept companies)

Cheers,

Aceyducey

 

[Peter_Tersteeg]

What's angel investing?

 

[Aceyducey]

What's angel investing?

High Net Worth individuals who invest funds into start-up companies.

Here's a good article on the topic: http://www.nasvf.org/web/allpress.nsf/pages/8431

Cheers,

Aceyducey

 

[Jas]

he/she " is a private wealthy individual that has no association with a venture capital firm, investment fund, etc. The "angel" invests private money into what he/she believes to be promising opportunities i.e., normally startup companies"

Normally they invest in early stage (or very early stage) and take no controling interest/board postition.

Jas

 

[mmerlin]

http://www.businessangels.com.au/
has an online matching service, and sells a workbook which explains the process