{"id":217,"date":"2018-03-23T14:08:38","date_gmt":"2018-03-23T18:08:38","guid":{"rendered":"http:\/\/www.atyourbusiness.com\/blog\/?p=217"},"modified":"2018-03-23T14:08:38","modified_gmt":"2018-03-23T18:08:38","slug":"how-to-determine-the-ipo-valuation-of-a-company","status":"publish","type":"post","link":"https:\/\/www.atyourbusiness.com\/blog\/how-to-determine-the-ipo-valuation-of-a-company\/","title":{"rendered":"How To Determine The IPO Valuation Of A Company"},"content":{"rendered":"

Have you ever wondered how companies come up with the price of their initial public offering? Here’s how to determine the IPO valuation of a company.<\/b><\/h4>\n

Did you know that the largest IPO in history was <\/span>General Motors in 2010<\/span><\/a> earning 23.1 million?<\/span><\/p>\n

You might be thinking but how could GM raise that much when they had been <\/span>bailed out<\/span><\/a> by the US Government in 2008.<\/span><\/p>\n

Well, the money raised during an Initial Public Offering will depend on the IPO Valuation.<\/span><\/p>\n

You may be wondering so how is this value determined.<\/span><\/p>\n

Ready to learn more?<\/span><\/p>\n

Basics<\/b><\/h2>\n

To understand IPO Valuation we have to start with the basics.<\/span><\/p>\n

What is an IPO?<\/span><\/p>\n

This is when a private company’s stock is offered to the public for the first time.<\/span><\/p>\n

For this IPO a complicated process happens that includes filings, prospectus and a ton of big words.<\/span><\/p>\n

During the process the company has to make many choices including having an independent <\/span>. But, at the end of the day this won’t give you an idea of their value.<\/span><\/p>\n

Unlike <\/span>trading futures<\/span><\/a> buying an IPO is based on projected value of the company.<\/span><\/p>\n

Which can be risky but it can be very rewarding as an investor if you play your cards right.<\/span><\/p>\n

It will all come down to how you analyze the possible outcomes of that first day of trading.<\/span><\/p>\n

Now How Can I Do My Own IPO Valuation?<\/b><\/h2>\n

If you are lucky enough to have the opportunity to invest in an IPO you’ve to go all in but with the right information on hand.<\/span><\/p>\n

This means doing your own valuation of the IPO.<\/span><\/p>\n

This valuation is no different than a company valuation. So you have to leave no stone unturned.<\/span><\/p>\n

The key here is to analyze but with a capital A.<\/span><\/p>\n

I know that we are all for don’t judge a book by its cover but in this case question everything and be objective.<\/span><\/p>\n

To determine the IPO Valuation of a company you have to look at its:<\/span><\/p>\n