The first public sale of stock by a private company is know as an initial public offering (IPO). The price performance of the company's shares after the IPO is called the after-market performance. An underwriting firm helps to establish the initial price of the new stock offering. After the IPO, the price of the stock is subject to the open market. The price of the stock is tracked for a period of time to determine its after-market performance.
The first three to nine months after an IPO is called the lock-up period. During this open-market trading period, the stock price, volume and insider activity are tracked and analyzed. Investment bankers and analysts can then decide whether to make more shares available. During the IPO, only a small percentage of the available shares are offered. The remaining shares held by the company are used to raise capital after the lock-up period has revealed the demand for shares.
After-market performance data is available online from the respective exchange. This report typically includes key data, company financials, company filings and a price chart. Potential investors can analyze this data to determine whether to buy shares. There is no specific period of time set for the lock-up period, but it normally lasts 90-180 days. It is called the lock-up period because large shareholders are not permitted to redeem or sell shares.
The key data report includes the company name, address and website. The shares offered and the shares outstanding are reported. The lock-up period and lock-up expiration date are also included. Vital information such as company description and competitors are revealed in this after-market performance report. The financial report includes revenue, net income and total assets.
The report will name the lead underwriter and other underwriters. Reports on company filings are also provided. Perhaps the most valuable performance report comes in the form of a price chart. The price chart reveals the historical and current price of the shares, along with the volume of trades. The price chart provides the actual performance at a glance and could be used to determine the perceived value of the new company.
Investors interested in acquiring shares might investigate the many news reports available online. Hot IPOs are new companies for which there is a high demand. The share price tends to rise quickly with hot IPOs. Before acquiring shares, an investor can analyze the after-market performance reports for key investment information.
