Financial Knowledge

IPOs & IPO Shares

This section summarizes what you should know before investing in IPO shares, including the initial public offering (IPO) process and listing requirements, book-building (demand forecast), offer pricing and allocation methods, lock-ups and the risk of share price swings after listing. Offering terms differ from one offering to another, so be sure to check the company's securities registration statement and prospectus.

La versione italiana di questa pagina è in preparazione. Fino ad allora il testo è mostrato in inglese.

52 questions · Last updated

  1. 01What is an IPO (initial public offering)?
  2. 02Do 'going public' and 'listing' mean the same thing?
  3. 03Once a company is listed, does the Korea Exchange guarantee its value?
  4. 04Why do companies go public?
  5. 05What are the steps in an IPO?
  6. 06What is the preliminary listing review and how long does it take?
  7. 07What does the listing review look at?
  8. 08Roughly what are the KOSPI market listing requirements?
  9. 09How do KOSDAQ listing requirements differ from KOSPI's?
  10. 10What kind of market is KONEX?
  11. 11What role does the lead managing underwriter play?
  12. 12What is a securities registration statement and when is it filed?
  13. 13Can I subscribe as soon as the registration statement is filed?
  14. 14Where can I see the prospectus and the report on securities issuance results?
  15. 15What is book-building (demand forecast)?
  16. 16How is the offer price determined?
  17. 17How is the indicative offer price range calculated?
  18. 18What problems arise if the offer price is set too high?
  19. 19How do I subscribe for IPO shares?
  20. 20What happens to the subscription deposit after allocation?
  21. 21Who gets IPO shares, and how many?
  22. 22What is equal allocation of IPO shares?
  23. 23Can I subscribe for the same IPO through several securities firms?
  24. 24What is allocation to the employee stock ownership association?
  25. 25What is a lock-up commitment?
  26. 26Is it true that institutions making lock-up commitments get IPO shares first?
  27. 27How does mandatory holding (protective deposit) differ from an institution's lock-up commitment?
  28. 28Can executives sell shares acquired through stock options right after listing?
  29. 29What is a put-back option (right to request repurchase)?
  30. 30What is an over-allotment option (greenshoe)?
  31. 31How much can the share price move on the first day of listing?
  32. 32Do IPO shares rise once they are listed?
  33. 33What should I check before investing in IPO shares?
  34. 34What are 'inflated subscriptions' by institutional investors, and how are they prevented?
  35. 35Can private fund managers and discretionary investment managers take part in IPO book-building?
  36. 36What is a technology special listing?
  37. 37How has the technology special listing system changed recently?
  38. 38What is a SPAC?
  39. 39How are the funds raised by a SPAC protected?
  40. 40How is a SPAC merger listing reviewed?
  41. 41What is a backdoor listing?
  42. 42What is pre-IPO investment?
  43. 43What are the main risks of pre-IPO investment?
  44. 44I was urged to buy unlisted shares because the company is 'about to list'. Is this safe?
  45. 45I was contacted with an offer to pre-subscribe at a price below the offer price.
  46. 46What is a KOSDAQ venture fund?
  47. 47How are high-yield funds (high-risk high-yield investment trusts) related to IPO shares?
  48. 48What is the cornerstone investor system?
  49. 49In what direction is the IPO system changing?
  50. 50If an offering is under KRW 1 billion, is it exempt from filing a securities registration statement?
  51. 51What are the primary market and the secondary market?
  52. 52How are the financial statements of a company about to list verified?

General financial information, not investment advice. Rules and tax rates change; please check the latest guidance from the source institution.