An Initial Public Offering, IPO or ‘float’, is the first offer of a company’s shares to the public, leading to a listing on the ASX. Such company IPOs and capital raisings provide investors with the opportunity to make new investments.
The benefits of investing in IPOs include the advantage of buying the stock at its initial issue price, as well as the potential for positive returns when the market is steady and rising.
However IPOs are less likely to suit a conservative investor due to the risk they carry. They can be very volatile, over-valued and issued from small companies. You can’t rely on a performance history and they can be more prone to failing in a down market.
If you are on a Burrell Premium Portfolio Service, we’ll give you priority notice of IPOs and capital raisings we participate in, together with our recommendation for action. Note we are selective on the IPOs we participate in. For retail offers we’ll provide you with a prospectus or Product Disclosure Statement (PDS), which includes the issue price, the minimum application amount and who the funds are to be made payable to. We will also provide closing dates, share registry contact details and the expected allotment dates.