Before listing
- The company publishes a prospectus with financial information.
- Price is set based on interest from institutional investors.
- Existing shareholders are informed about terms and lock-up periods.
During listing
- The stock begins trading on the exchange. Price can rise or fall sharply on day one.
- Often there's a "pop" — an initial price increase — but this is not guaranteed.
After listing
- Lock-up periods apply (typically 90-180 days).
- The company must now follow exchange reporting requirements.
- Market price begins to be driven by supply and demand.
Common scenarios
- Successful IPO — Strong demand, price increase, good liquidity.
- Weak IPO — Price falls below listing price. May take time to recover.
- Delayed IPO — Company postpones listing due to market climate.
Summary
An IPO is a transformative event. As an early investor, you should understand lock-up terms and have a plan for if and when you want to sell.