Initial Public Offering (IPO) refers to the first sale that a company makes on its stocks to the general public. Before the IPO process, companies are considered private as their stocks are controlled by small members within the organization like friends, founders, and family. IPO helps companies generate income for growth and expansion. The IPO pricing follows various regulations and is carried out in due diligence. The price of an IPO defines how the public views a company. High pricing may make the members of the public about investing in such a company. Exceedingly low prices also lower a company's credibility among members of the public. The price of the IPO also determines the amount of money that a company can raise from IPOs. IPO pricing must also attract customers by providing favorable pricing that investors feel comfortable paying. Through IPO valuation, analysts can determine the most suitable and effective pricing that members must pay for the IPO.
Securities dealers are firms or individuals specializing in market transactions. Securities dealers play a significant role in the market place. First, dealers help firms by issuing new securities. Through market placement and underwriting techniques, securities dealers can help firms resolve emerging security issues in the marketplace. Securities dealers also provide customers with investment advice, which could be crucial in attaining benefits or losing. The dealers also perform market-making activities, which are essential in supplying liquidity in the market. Securities dealers also facilitate trading activities in the marketplace. In their role, dealers publish investment researches while also raising capital for the investment companies. Hence, dealers ensure the marketplace's stability, providing investors and firms with the needed advice on their investments.
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