IPO Risk Management: Risks of an Initial Public Offering

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Bachelorarbeit aus dem Jahr 2012 im Fachbereich BWL - Unternehmensführung, Management, Organisation, Note: A, University of Massachusetts Boston, Sprache: Deutsch, Abstract: In these current times of the dotcom mania, an investor can throw a lot of funds into a particular IPO and be guaranteed disappointing returns. Majority of companies such as theglobe.com and VA Linux saw big 1st day profits but disappointed their investors in the long run. Nevertheless, companies that had the foresight of the 'get in and out' risks involved in an IPO made investing look simpler. However, no investment is always a sure deal and investors are today making focus on the long term gain rather than the 'quick buck.' Notwithstanding the current mega economic upshots not only in Saudi Arabia but also in the worlds largest economies, a company contemplating going public must prepare itself for the IPO transactions, steer the business to immense success and most importantly, analyze the risks involved in a bid to minimize them and cultivate some worthy investment for the company in the dynamic market. Going public is not easy but the rewards are monumental and the keys are knowing the risks and finding a way to minimize them. Making investment decisions is quite complex and cannot be taken as a precise science. Nevertheless, estimating and understanding the portfolio framework for investment decisions in the context of foreign investments is one critical task that every nation is endowed with. Carefully made investment decisions answers the questions of whether a country has the financial muscle to breed cash flow and a portfolio framework that will be enough to maintain a long term investment. With all this said and done, one will be sure to come up with a good portfolio framework for investment in their context foreign investments.