NEW YORK, May 17\u00a0\u2014 Hundreds of companies raised a combined US$70 billion (RM280 billion) by selling shares to the public in the United States last year.<\/p>\n
But 2026 could shatter records, with rocket and AI company SpaceX, ChatGPT-maker OpenAI and AI startup Anthropic all potentially making their stock market debuts.<\/p>\n
So what exactly does it take for a company to \u201cgo public\u201d? The process, known as an initial public offering or IPO, typically takes months or years and can cost millions of dollars.<\/p>\n
Here is how it works:<\/p>\n
Picking a stock exchange\u00a0<\/p>\n
The first big decision is where to list.<\/p>\n
In the US, two options dominate: the New York Stock Exchange (NYSE) \u2014 the oldest and most famous, with its iconic trading floor in lower Manhattan \u2014 and the Nasdaq, a fully electronic exchange that is home to most of the biggest tech companies.<\/p>\n
Together, they account for roughly half of the total value of all stocks traded worldwide.<\/p>\n
Companies also have to pick a \u201cticker\u201d \u2014 the short letter code that identifies their stock.<\/p>\n
Some keep it simple (MSFT for Microsoft), while others get creative (DNUT for Krispy Kreme donuts, CAR for rental company Avis).<\/p>\n
Hitting the road\u00a0<\/p>\n
Before a company can sell shares to the public, it has to file a detailed document called an S-1 with the Securities and Exchange Commission (SEC), the US government agency that oversees financial markets, and Wall Street\u2019s de facto referee.<\/p>\n
The S-1 is essentially a deep dive into the company\u2019s finances, business model and risks, designed to help ordinary investors make informed decisions.<\/p>\n
As JPMorgan puts it, it has \u201cthe dual purpose of registering the securities with the SEC and educating investors on the opportunity.\u201d<\/p>\n
The SEC reviews the filing and can ask lots of questions.<\/p>\n
\u201cFor an S-1 filing, that can sometimes go through several rounds of comments from staff, so it could take months,\u201d SEC Chairman Paul Atkins said recently.<\/p>\n
He added that the agency is working to speed things up.<\/p>\n
SpaceX is expected to file its S-1 this week, according to a source close to the matter.<\/p>\n
The pitch\u00a0<\/p>\n
Once the paperwork is underway, company executives hit the road \u2014 literally. They travel city to city (and hop on video calls) in what is known as a \u201croadshow,\u201d pitching their company to big institutional investors like pension funds and hedge funds, as well as everyday retail investors.<\/p>\n
SpaceX is planning a special event for 1,500 individual investors in June, according to CNBC.<\/p>\n
Not every company makes it through this stage. Fintech firm Clear Street pulled the plug on its IPO plans in February after failing to drum up enough interest, blaming market volatility.<\/p>\n
Deciding on a price\u00a0<\/p>\n
The trickiest part may be settling on a share price \u2014 the cost of one piece of ownership in the company when it first hits the market.<\/p>\n
\u201cPricing an IPO is probably more art than science,\u201d said Matthew Kenney, IPO specialist at Renaissance Capital.<\/p>\n
Banks advising the company want to raise as much money as possible, but they also need to leave room for the stock to rise once trading begins \u2014 otherwise, no one will want to buy it.<\/p>\n
\u201cIf you really seek to maximize the share price, you\u2019re going to have very little aftermarket demand and the IPO can flop and nobody wants to be ringing the opening bell and see their stock price fall,\u201d Kenney said.<\/p>\n
Sometimes companies get it wrong and have to adjust.<\/p>\n
Chip startup Cerebras revised its target price twice before finally going public at US$185 a share \u2014 then watched the stock soar 68 per cent on its very first day of trading. \u2014 AFP<\/p>\n","protected":false},"excerpt":{"rendered":"NEW YORK, May 17\u00a0\u2014 Hundreds of companies raised a combined US$70 billion (RM280 billion) by selling shares to…\n","protected":false},"author":2,"featured_media":454457,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[3673,61,60,7389,1388,1682,82,4854,247,2306],"class_list":["post-454456","post","type-post","status-publish","format-standard","has-post-thumbnail","category-space","tag-anthropic","tag-ie","tag-ireland","tag-nasdaq","tag-new-york-stock-exchange","tag-openai","tag-science","tag-securities-and-exchange-commission","tag-space","tag-spacex"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/454456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=454456"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/454456\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/454457"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=454456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=454456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=454456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}