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All about IPOs from Samso

Updated: Dec 11, 2022

✦ It's one of those acronyms you hear thrown around in the investment industry, but what exactly is an IPO and how does it work? Noel Ong, CEO of Samso sheds some light on this.


What is an IPO?


When a company transitions from a private to a public company, they go through the process of offering shares of their private corporation to the public in a new stock issuance for the first time. That's an IPO. An Initial Public Offering. It allows a company to raise equity capital from public investors. For the first time, public investors can participate and this is a big step for a company because it allows the company to grow, expand and have access to raising money. It also means transparency in the company and increased share listing credibility.


It's been a busy period for IPOs over the past two years. Brilliant-Online investments
It's been a busy period for IPOs over the past two years. (Photo: Albert Hyseni, Unsplash)

How does an IPO work?


It's been a busy period for IPOs over the past two years. There must have been nearly 100 IPOs in 2021 and we're looking at 62 as of September 2022.






I myself have personally been involved with IPOs directly and indirectly. So I know from personal experience and sharing conversations with other thought leaders on our Coffee with Samso segments that an IPO is not a simple process and involves a lot of hard work. I have been involved recently in an IPO and the entire process of preparing and getting the prospectus live, sharing about the company's projects in South Australia and WA is an intense one. We are looking at a mineral system in South Australia that is unknown and could be very big. Geologists will understand the thrill of exploration and why moments like this can be very exciting indeed.




Investors who are keen to DYOR (Do Your Own Research) would find it useful to keep an eye open for IPOs and learn more about what start-up mining companies need to do to be eventually listed on the ASX. You need to know what makes a good IPO, the factors involved and how important pre-IPO investors are.


Factors to consider in an IPO

  • Does the company have good projects?

  1. Market Sentiment Commodity

  2. Strong conceptual Exploration strategy

  3. Not over priced projects

  • Presence of cornerstone investor(s)

You need an investor group or an investor who believes you. The strength of the IPO usually comes out of this group of investors. The strength of the company post listing comes out of this group of investors as well.

  • Supportive Pre-IPO Investors

A pre-IPO group of investors that support the story of the company is the next critical step.

  • Good story telling process

The concept or the story of the IPO is something that is going to drive the reasons for all investors. The story will be a combination of the project, as in how good it is etc and backing the management. They are proven players, they have the incentive, and they have the skill to do it.

  • Market sentiment helps

This will be the obvious factor. While there is support for IPOs that look at upcoming trends, market sentiment or flavour also helps immensely.

Step up in your investment knowledge and get a better understanding of IPOS with Noel Ong on Samso's Mining HQ Podcasts Ep.23:

Listen to Noel Ong explaining the IPO process here:


Contact Samso

Samso helps executives tell ASX stories that pique interest.

t/ +61 490 092 814

 

Disclaimer


This article is sponsored content.


ASX companies engage Samso and Brilliant-Online to share their commentary on the progress of their companies and projects. The author, owners of Samso and Brilliant-Online and associated entities may or may not hold shares of these companies.


The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. - Samso


About the Author


Noel Ong, CEO of Samso tells compelling stories by engaging business leaders to reveal insights beneficial to the investment community.


Contact Samso


Samso helps executives tell ASX stories that pique interest.

t/ +61 490 092 814

 

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