Monthly archive: November, 2007
The Right Place And The Right Type
Katy asks:
It really is one of the oldest pick-up lines in the book. I’m sure Neanderthals were standing around rocks looking at one another and grunting the question. Are you my type? Whether it is people, cars, music or pets, finding the type that suits you is important to your overall well being and happiness.
Finding something that fits you and where you are in life can be the best of heaven. Settling with something that does not match your dreams or desires is the worst kind of hell. Online investing offers another opportunity to do the same kind of seeking. When it comes to investment options, what is your type?
Options and Futures
Options and Futures get their value from the buying and selling of stock based in a future date. The two are often joined in thought but have one important difference. Options give the contract holder, buyer or seller, the option to trade the stock at preset date but there in no legal obligation to do so. Futures require the contract holder to sell or buy the stock at a preset date. Futures have a higher income potential, however also have more of a financial risk. The science of both options and futures is an intricate ability for short term prediction of capital gain. It is not recommended for new traders and an experienced broker offering guidance and advice is a requirement.
Mutual Funds
Mutual funds are a great place for a new investor to being to learn about online trading, and the practice of investing. Mutual fund groups combine the investments of many people to create a large enough fund to invest in a diversified stock portfolio. Mutual funds offer many benefits including ability for small initial investments, more opportunities for top stocks because of the buying power of the combined investments, and relatively low risk because of the ability of the fund to diversify stocks and balance out the portfolio from ups and downs. The return is not as elevated as a high yield stock, but the lower risk is generally worth it.
IPO’s
When internet giant Google put their stock out for sale the previously unknown world of IPO’s came into the public eye like never before. IPO stands for Initial Public Offering. When a company takes itself public IPO buyers have a chance to get in on the “ground floor” of a new company or an established company going into a new financial arena. IPO’s can be a great opportunity to get stock at a lower rate because of the speculation as to how well the company will really do. If you buy a stock at the low rate and the business takes off you have a chance for amazing profits. However, there is also the risk that the company won’t take off. Businesses fail everyday and even established companies simply don’t do well in the public stock arena. IPO’s carry a low buy-in and a moderate risk. An experienced broker’s guidance is helpful to new traders as they invest in IPO’s as a major part of their portfolio.
The good news in the world of online investing is you can have more than one type. A portfolio balanced with different types of stocks can provide congruence between the investment and risk to protect your future and add to your ability to profit. The next time someone asks your type you can answer with confidence, “I like all kinds!”
It really is one of the oldest pick-up lines in the book. I’m sure Neanderthals were standing around rocks looking at one another and grunting the question. Are you my type? Whether it is people, cars, music or pets, finding the type that suits you is important to your overall well being and happiness.
Finding something that fits you and where you are in life can be the best of heaven. Settling with something that does not match your dreams or desires is the worst kind of hell. Online investing offers another opportunity to do the same kind of seeking. When it comes to investment options, what is your type?
Options and Futures
Options and Futures get their value from the buying and selling of stock based in a future date. The two are often joined in thought but have one important difference. Options give the contract holder, buyer or seller, the option to trade the stock at preset date but there in no legal obligation to do so. Futures require the contract holder to sell or buy the stock at a preset date. Futures have a higher income potential, however also have more of a financial risk. The science of both options and futures is an intricate ability for short term prediction of capital gain. It is not recommended for new traders and an experienced broker offering guidance and advice is a requirement.
Mutual Funds
Mutual funds are a great place for a new investor to being to learn about online trading, and the practice of investing. Mutual fund groups combine the investments of many people to create a large enough fund to invest in a diversified stock portfolio. Mutual funds offer many benefits including ability for small initial investments, more opportunities for top stocks because of the buying power of the combined investments, and relatively low risk because of the ability of the fund to diversify stocks and balance out the portfolio from ups and downs. The return is not as elevated as a high yield stock, but the lower risk is generally worth it.
IPO’s
When internet giant Google put their stock out for sale the previously unknown world of IPO’s came into the public eye like never before. IPO stands for Initial Public Offering. When a company takes itself public IPO buyers have a chance to get in on the “ground floor” of a new company or an established company going into a new financial arena. IPO’s can be a great opportunity to get stock at a lower rate because of the speculation as to how well the company will really do. If you buy a stock at the low rate and the business takes off you have a chance for amazing profits. However, there is also the risk that the company won’t take off. Businesses fail everyday and even established companies simply don’t do well in the public stock arena. IPO’s carry a low buy-in and a moderate risk. An experienced broker’s guidance is helpful to new traders as they invest in IPO’s as a major part of their portfolio.
The good news in the world of online investing is you can have more than one type. A portfolio balanced with different types of stocks can provide congruence between the investment and risk to protect your future and add to your ability to profit. The next time someone asks your type you can answer with confidence, “I like all kinds!”
Reliance Power Trying to Rush With Ipo
Shantel asks:
Reliance Power trying to rush with IPO by modifying originally proposed terms in order to avoid public scrutiny and answers to key questions related to corporate governance.
SEBI has cleared it without addressing concerns of Reliance Energy investors.
Discount to retail investor is only a gimmick. High premium being charged from public who are being hoodwinked with a facility to pay in installments. Promoters enriching themselves with shares issued at cheap price.
SEBI should not allow the IPO to go ahead without studying the verdict of Securities Appellate Tribunal and courts. Public should not suffer.
Poor corporate governance already affecting power sector. Consumers suffering due to high tariffs and erratic supply. Several Resident Welfare Association’s (RWA’s) in East Delhi have written a letter to Delhi Power Minister A.K.Walia demanding better power infrastructure including improved wiring and street lighting and pruning of trees on wires and eliminating growing regular power cuts.
Regular four to five hour daily power cuts are taking toll on daily life of residents and students. Most of the kitchen gadgets do not work on invertors, same is with washing machines. Daily house hold chores go haywire due to power cuts.
Reliance Power trying to rush with IPO by modifying originally proposed terms in order to avoid public scrutiny and answers to key questions related to corporate governance.
SEBI has cleared it without addressing concerns of Reliance Energy investors.
Discount to retail investor is only a gimmick. High premium being charged from public who are being hoodwinked with a facility to pay in installments. Promoters enriching themselves with shares issued at cheap price.
SEBI should not allow the IPO to go ahead without studying the verdict of Securities Appellate Tribunal and courts. Public should not suffer.
Poor corporate governance already affecting power sector. Consumers suffering due to high tariffs and erratic supply. Several Resident Welfare Association’s (RWA’s) in East Delhi have written a letter to Delhi Power Minister A.K.Walia demanding better power infrastructure including improved wiring and street lighting and pruning of trees on wires and eliminating growing regular power cuts.
Regular four to five hour daily power cuts are taking toll on daily life of residents and students. Most of the kitchen gadgets do not work on invertors, same is with washing machines. Daily house hold chores go haywire due to power cuts.
Going Public via Initial or Direct Public Offering: Role of the Securities and Exchange Commission
Willette asks:
The Securities and Exchange Commission (SEC) is the most well-known and feared governing body in the financial world. Its very name can be intimidating to a small company hoping to go public, but it doesn’t have to be.
The SEC was established by Congress to regulate securities markets with the intent of protecting investors. For this reason, it requires registration for the issuance of almost any kind of securities, including mail or internet-based issues.
In an initial public offering, the process of filing necessary paperwork with the SEC can be time-consuming and complicated. First, a registration for must be filed and declared effective. Despite the fact that the registration becomes public knowledge immediately, the company may not attempt to sell shares until the registration is declared effective. Registration documents include a prospectus to be given to all investors, as well as a section that is made available on the SEC website but which does not have to be provided to investors. A company’s underwriter will prepare and file these documents with the help of accountants and lawyers.
For a company that has gone public through an IPO, SEC requirements don’t end with the issuance of shares. Continued disclosures must be made concerning a variety of topics, including details of operations, key employees and shareholders, major stock transactions, and general health of the company. Because these disclosures are so numerous and frequent, there is a substantial cost involved that should not be overlooked when making the decision to go public.
Despite the expense of SEC compliance, the cost of issuing stock would be higher without the SEC. Because of SEC regulations, a large pool of information is available to potential investors. Further, many otherwise unethical businesses are given good motivation to avoid misrepresentation on company financial documents. This makes investing safer for everyone, and allows investors to trade with less prejudice at higher prices.
For smaller businesses, the process of issuing shares is less complicated. Shortened forms and procedures allow businesses seeking smaller amounts of capital to publicly sell shares without the use of an underwriter. These rules also allow slightly reduced reporting requirements, as compared to companies going public through an initial public offering. The overall effect is a public issuance that costs significantly less than the traditional process for going public.
More recent SEC rules also allow for the public trading of direct public offerings issued by those small companies. With the appropriate filings in place, small companies can apply to have their shares traded on over-the-counter bulletin board exchanges, giving added liquidity to their offerings. In this manner, the SEC has helped to encourage small business and innovation by democratizing the availability of capital.
Despite the often negative opinions about the SEC and its requirements, it is an organization that acts in the best interest of investors and for the overall good of the market. Proper attention and diligence can ensure that an offering goes smoothly in spite of the inconvenience of necessary filings.
The Securities and Exchange Commission (SEC) is the most well-known and feared governing body in the financial world. Its very name can be intimidating to a small company hoping to go public, but it doesn’t have to be.
The SEC was established by Congress to regulate securities markets with the intent of protecting investors. For this reason, it requires registration for the issuance of almost any kind of securities, including mail or internet-based issues.
In an initial public offering, the process of filing necessary paperwork with the SEC can be time-consuming and complicated. First, a registration for must be filed and declared effective. Despite the fact that the registration becomes public knowledge immediately, the company may not attempt to sell shares until the registration is declared effective. Registration documents include a prospectus to be given to all investors, as well as a section that is made available on the SEC website but which does not have to be provided to investors. A company’s underwriter will prepare and file these documents with the help of accountants and lawyers.
For a company that has gone public through an IPO, SEC requirements don’t end with the issuance of shares. Continued disclosures must be made concerning a variety of topics, including details of operations, key employees and shareholders, major stock transactions, and general health of the company. Because these disclosures are so numerous and frequent, there is a substantial cost involved that should not be overlooked when making the decision to go public.
Despite the expense of SEC compliance, the cost of issuing stock would be higher without the SEC. Because of SEC regulations, a large pool of information is available to potential investors. Further, many otherwise unethical businesses are given good motivation to avoid misrepresentation on company financial documents. This makes investing safer for everyone, and allows investors to trade with less prejudice at higher prices.
For smaller businesses, the process of issuing shares is less complicated. Shortened forms and procedures allow businesses seeking smaller amounts of capital to publicly sell shares without the use of an underwriter. These rules also allow slightly reduced reporting requirements, as compared to companies going public through an initial public offering. The overall effect is a public issuance that costs significantly less than the traditional process for going public.
More recent SEC rules also allow for the public trading of direct public offerings issued by those small companies. With the appropriate filings in place, small companies can apply to have their shares traded on over-the-counter bulletin board exchanges, giving added liquidity to their offerings. In this manner, the SEC has helped to encourage small business and innovation by democratizing the availability of capital.
Despite the often negative opinions about the SEC and its requirements, it is an organization that acts in the best interest of investors and for the overall good of the market. Proper attention and diligence can ensure that an offering goes smoothly in spite of the inconvenience of necessary filings.
Are ex-employees subject to a lockup period after an IPO?
Vanetta asks:
Typically there is a 6 month holding period after a company IPO’s, before pre-ipo investors and company employees are allowed to sell their shares of stock.
Are ex-employees subject to the same holding period ? (employees that left the company before the IPO, but own pre-ipo stock from exercising options when leaving the company)
Typically there is a 6 month holding period after a company IPO’s, before pre-ipo investors and company employees are allowed to sell their shares of stock.
Are ex-employees subject to the same holding period ? (employees that left the company before the IPO, but own pre-ipo stock from exercising options when leaving the company)
