Can someone tell me how a company can do an IPO w/no revenues or income? I'm not talking about any particular company, but I've seen it done. Or how can an existing pubically traded company with a net loss stay in bussiness. Seems like I always hear about companies having net losses for 8 straight quaters or something, how can these companies stay in business. Seems like just about anyone with an idea for a company can do an IPO today.
i remeber how it was back in the late 90's, i'm just curiuos how any company now or then can go public with no revenues or anything. Does the underwriter not care about that? or are they only after the money involved in taking a company public.
these companies are no different than households living in debt... go take a look at how much debt GM, CAT, F, DE, TWX, etc and see how much debt they're in... some are in more debt than their mkt capital.
one thing I never understood, is how these new companies paid the expenses of having an ipo, with auditors, lawyers, printing etc. i've heard that a small ipo can costa around 250,000.00, with no revenues, were does that money come from.
that's one thing i'm curiuos about, is how do these companies with so much debt for so long(and i mean years, not a few months) stay in business? when they have a net income that is negative and has been that way, the money has to come from somewhere
is that legal? I always thought the sale of stock was supposed to be used to better the companies business development, not get it out of debt? Does the same hold true for IPO's?
everything is disclosed in the prospectus what the monies raised will be for... you the investor need to read it before you buy any shares... bottom line... read all your info on ipo's and secondaries and see what the money is used for...