Stock Market Unit where shares of stock are

Stock Market Unit: where shares of stock are bought and sold http: //www. investopedia. com/university/ipo/default. asp

What is a stock? l Stock: l l Ownership in a public company You own a % of the company Also known as a Security But…. § l You have no say in business operations You make or lose money based on the increasing / decreasing of the stock price

What is an IPO? l l l Initial Public Offering is the first sale of stock by a company to the public As an investor, your goal is to ‘GET IN EARLY”….

Why Go Public? l l Going public raises CASH and usually a lot of it. Being publicly traded also opens many financial doors A world of investors are now giving you Cash to make your company bigger, stronger, more powerful. You can make more of your product, hire more people, develop your product better, etc…. Trading in the open markets means liquidity.

WHO IS GOING PUBLIC NOW? ? l Set www. marketwatch. com to your Favorites l http: //www. marketwatch. com/tools/ipo. Ce nter. asp? v=2&siteid=mktw

What moves stock prices? ?

Companies fall into two broad categories 1. PRIVATE l A privately held co. is in business to make $ for the owner(s) l Most small businesses are private l But large companies can be private too. l Did you know that IKEA, Domino's Pizza and Hallmark Cards are all private?

2. Public companies: on the SM l Public companies have thousands of shareholders that can buy or sell shares of ownership of the co. l l It is an investment for them bc they believe this co. is going to make them money They have no say in business operations, it is a risk they take to make $ Must follow strict rules and regulations set by the government They are governed by a board of directors

IPO’s l Google at IPO: $85. 00 l Today: $_______ l Microsoft at IPO: $21. 00 l Today: $______ l l Stock has split 288 times IF you bought 1 share at the $21. 00 IPO price, today you'd have 288 shares worth $8, 331. Collectively, the shares sold in Microsoft's IPO cost investors $58. 7 million and, even at today's drastically reduced post-bubble prices, are worth $22. 9 billion.

The process to go Public Private Company has to hire to propose to the GOV’T that they want to go Public…. 1. l l Investment Firms: Deutsche Bank, J. P. Morgan, Morgan Stanley The SEC: The Securities and Exchange Commission: the government “police” of public companies l Makes sure that public companies are operation their business ethically and legally

l You will be assigned an Underwriter l Professional who will help you write the proposal

2. The Proposal contains the following info: l l financial statements for the life of the company management background any legal problems where the money is to be used once they go public

l 3. If the SEC approves your proposal, an IPO price needs to be decided l It depends on the size of company, the success of the company, current market conditions, and what your competitor is trading at.