What was the harm of the initial public offering? / Are primary supplies expensive?
According to Tejarat News, in recent weeks, with the entry of initial public offerings into the stock market and further decline in the overall index, some symbols such as Fajhan and Fesbzvar, which have just entered the market, faced a negative trend and the buying queue of these two initial public offerings was broken in less than a week. شد. But why did this year’s early releases play a role in creating a negative atmosphere and further improving the index?
Maryam Mohebbi, a stock market expert, told Tejaratnews about the way initial public offerings enter the stock market: “The initial public offering of companies is in fact the most attractive investment option for investors, especially newcomers and people with low capital.”
Stock symbols that are listed in any of the stock or OTC markets are first evaluated by one of the investment or financing consulting companies.
He added: “This value determination is based on a thorough review of the company, estimating future profitability, estimating the expected rate of return of the investor and using valuation methods such as cash flow discounts.”
Mohebbi said: “If the value of the stock offered in the market is not considered appropriate by the relevant companies and is offered as an overvalue in the stock exchange, this issue will cause several damages in a chain on the overall structure of the stock market.” Because shareholders notice this overselling at the time of offering or when buying and lose their trust in the neutrality of the organization as well as the valuing company.
Effects of initial selling price
He said about the harmful effects of selling initial public offerings in the market: “This will cause investors to leave the stock market early and consequently withdraw liquidity from the market, which could bring the proceeds from the initial public offering into the company’s development process.” Therefore, shareholder losses cause capital outflow from the productive sector of the country’s economy, and at the same time the credibility and ability to evaluate the value of a symbol that has not been properly recognized by the relevant companies, the overall credibility of the valuing company and the overall structure of the stock exchange organization.
He stressed: “Therefore, it is necessary for investment consulting companies or capital raising as competent institutions by the stock exchange, to appreciate the trust of investors and the stock exchange organization, and by announcing the true intrinsic value of each symbol, increase the attractiveness of public participation in buying initial public offerings.”
In another part, Mohebbi said about the importance of the time of offering a share to the stock market: “The time of offering is more important than the issue of whether it is expensive or not.” Although recent initial public offerings could have been offered at a better price, even the cheapest share, if offered at the wrong time, would challenge the normal course of the market.
He added: “Recent offers were locked in the sales queue in less than a week from the time of release, which indicates and confirms the importance of the need to enter the initial offers at a reasonable price and at the right time.”
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