An IPO (Initial Public Offering) is when a private company sells shares to the public for the first time. Investment banks underwrite the deal and set the price. SPACs are a faster alternative route to public markets.
Answer: Pricing, marketing, and guaranteeing the share sale to investors. Underwriters (investment banks) structure the deal, conduct roadshows, set the price, and buy unsold shares.
Answer: Insiders and early investors from selling shares immediately after listing. Lock-ups (typically 90–180 days) prevent insider dumping immediately post-IPO — protecting new public shareholders.
Answer: A blank-check shell company that raises capital through IPO to merge with a private company. SPACs raise money first, then hunt for a private company to merge with — giving that company a back-door public listing.
Answer: Institutional investors who get allocations at the offer price. Institutional allocatees buy at the offer price and sell into the pop — the company actually raised less than it could have.
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