Understanding and Participating in Initial Public Offerings

Webull 06/14/2022

When a company goes public, it sells shares for the first time to the general population. This means that investors with the interest to do so are able to purchase a stake in a business at the beginning of its journey as a publicly traded company. Webull currently provides access to hundreds of IPOs and secondaries, making our platform a great place for those who are interested in participating in one.

What is an IPO?

IPO stands for Initial Public Offering. A company may choose to go public for many different reasons, but typically it is to allow the company to grow and develop with the help of investors. Before the company can official go public, it must meet several requirements and attend to some necessary housekeeping, which is described in more detail on Webull Learning. Posting an IPO can generate a fair amount of publicity for a company, though also comes with an increased workload. Once a company is publicly traded, they then must adhere to disclosure requirements and answer to shareholders, among other things. But, the potential growth of a company can make all of the extra paperwork worthwhile and holds possible benefits for those involved; not only for the company itself, but for the shareholders as well.

There is more than one type of IPO. The two most common are book building and fixed price. What does this mean? A fixed price IPO has a set price that doesn’t change—hence the fixed price. If you participate in a fixed price IPO, you pay the full fixed price when you buy. Most IPOs are of this type, though some may fall into the book building category. This type of IPO allows investors to report the number of shares they’d like and what they are willing to pay before the company decides on a final price. While IPOs can be placed into even more specific categories, these are the most common and most general classifications.

Investing with Webull

Webull has provided access to IPOs since 2019. In 2021, we provided access to over 100 IPOs and over 75 Secondaries. So far in 2022, we have provided access to 27 IPOs, 21 SPAC IPOs, and 8 Secondaries.

To buy IPO stocks on Webull, you must have at least $100 already in your account, as this is the minimum purchase order. Click on United States in the Markets tab to find the IPO Center, choose your stocks, and select order. Once you’re done, you can check the status of your stocks on the Orders tab or cancel an order if it’s unfinished. It’s important to note that your order is only an indication of interest, and receiving it relies on several factors.

Interested in participating in an IPO? View current offerings or visit our Learning Center to find out more about how IPOs work.

Disclaimer: IPO/Secondary orders only represent conditional offer to buy and do not guarantee you will receive all shares requested. There is a possibility you will be allocated less or none at all. This depends on the demand, type of offering, and past IPO involvement.

Disclosure: Trading of stocks and all other investment products involves substantial risk of loss and is not suitable for every investor. The value of stocks may fluctuate and as a result, clients may lose more than their original investment. Investors must evaluate particular financial circumstances to determine whether or not ordering IPOs is appropriate for them.