With Aussie shares at record highs it’s no wonder investors are looking for new ways to invest and snag an interest in new opportunities. While most people only look at trading stocks when investing, the female founders of a company called The Capital Network or TCN, are across what’s happening and they say there’s a record number of IPOs on the market right now which is when a private company opens its doors to the public.
It’s called an IPO because it stands for ‘Initial Public Offering’ or ‘the first time shares are available to the public.’ Female founders of TCN – Julia Maguire and Lelde Smits – have spent much of their working lives either supporting and working with companies as they go public or helping investors find IPOs to invest in.
There’s a record amount of IPOs to choose from right now
Lelde Smits says there’s a large number of IPOs registering right now: “Not since 2007 has there been so many IPOs,” she says, adding that according to Refinitiv, there has been 121 companies list on Australia’s stock exchange this year and if we keep going this way, we could surpass the previous record as we still have two months left in this year.
“This also represents a steep rise from the 84 companies which listed last year,” Smits adds..
“As IPOs have historically been offered to institutional investors it can be harder for retail investors, or ‘mums and dads’ to access an offer before it becomes public,” Smits says. “By setting up an account with a broker or lead manager of the IPO, the investor has a better chance of getting access to private companies,” she adds.
IPO investing process and risks
The Capital Network’s Co Founder and Executive Director Julia Maguire has spent her entire career connecting with investors and believes IPOs receive interest as investors clamour to get stock before it becomes publicly available.
Julia Maguire says: “As there are access and information challenges for many mum and dad investors to get involved in IPOs, it’s important that investors are proactive in securing information such as the company’s prospectus, reading through the opportunities but seriously considering the risks.”
And Smits adds: “With demand for IPOs so strong it’s important all investors are particularly discerning and above all remember, ‘read the prospectus’, because this is the key document you should start with.”
Maguire says it’s all about the long term view: “Ringing the bell is only a moment of celebration for what represents a long journey in public life as a stock and its shareholder relationships and returns.”
They add it’s best to keep checking online and view all the latest companies heading for an ASX listing. One way you can do this is to keep referring to this ASX link.
Understanding any investment includes considering the business, its management, financials and capital structure as well as having an understanding of why the company is listing and what they are going to do with the money they raise at IPO.
Investors will need to complete an application form which can be found in a prospectus or obtained from your broker, The Australian Investors Association says. It’s also important to keep in mind that you may not know how many shares you’ve been issued until the float date. If an IPO is oversubscribed, you may even miss out if you wait too long to get your paperwork in.
Australia’s IPO Network
Having worked with both companies and investors, TCN is acutely aware of the issues surrounding both groups and has just this week been welcomed into Australia’s IPO Network as the only Investor Relations member to help founders and entrepreneurs on the road to listed life.
IPO Network Member Representative Jeffrey Luckins credited The Capital Network for its thought leadership in the capital markets, sound ethical behaviours and a commitment to empowering environmental, social and governance investment.
The impact on our global community is increasingly a factor important for all stakeholders and will also be at the forefront of the IPO Network’s founding member organisations, William Buck, The CFO Solution HQ, SLM, BoardRoom Limited, Bell Potter Securities, Collier Creative, Ansarada, Pinstripe Media and Honan Insurance Group.
Smits says for a founder of a company, there’s no more exciting time than when you debut your company on an exchange and welcoming new shareholders. “For investors, it can be a great opportunity to get involved in companies before they hit the mainstream,” she says.
Smits started her ASX IPO journey interviewing CEOs about their ASX listing day back in 2014. You can watch this video where she interviewed the CEO of 3P Learning Limited Tim Powers about the company listing on the ASX. Smits then moved to New York and reported on IPOs such as Ferrari NV (NYSE:RACE) in 2015.
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