What is IPO,IDO,ICO ? 06 things to know about IPO investment in Crypto
What is IPO,IDO,ICO ? 06 things to know about IPO investment in Crypto
What is IPO? All the important knowledge to know about IPO
IPO is one of the activities that help companies increase prestige and capital very quickly. However, not everyone knows about IPOs. So what is an IPO? The following article will summarize all the important knowledge you need to know about IPOs. We invite you to follow us!
What is IPO?
What is IPO ? IPO (or Initial Public Offering), literally means "Initial Public Offering". This term is used to refer to a company that first raised funds widely from the public through the initial issue of shares and listing on the stock exchange. In which, the public is understood as a collection of investors with a large enough value of securities offered. After the initial public offering, a joint-stock company will officially become a public company, also known as a public joint-stock company.
What is the purpose of an IPO?
The need to increase capital for the company is always a priority, because thanks to that, the company can expand its scope of operations and development, helping to accelerate revenue more effectively. Issuing and listing shares on the stock market is the best way to increase capital and create a lot of financial opportunities. This form of equitization also helps employees in the company own a certain amount of shares from the company.
Here are the purposes that make the IPO an extremely effective business tool for the company:
Affirming the company's resources and position in public, contributing to increasing brand value and reputation.
Help mobilize a large amount of capital from many investors in the community to expand the scale of operations.
The IPO process carries more value than issuing corporate bonds.
Equitization activities contribute to attracting potential human resources and building a team of capable employees.
The IPO process is seen as a stepping stone for potential mergers and acquisitions of small businesses.
What are the conditions for companies to conduct IPOs?
Conditions for implementing an IPO seem to be quite high through specific standards as follows:
The company must have a charter capital of 10 billion VND or more in the accounting books at the time of registration for IPO procedures.
Business activities in the most recent year up to the time of registration for the issue of shares must be profitable.
There must be a specific plan and plan on the implementation of the IPO, the use of capital raised after the IPO approved by the Board of Directors and commitment to responsibility.
Enterprises with 100% state capital must convert the type of company into a joint stock company.
Enterprises in the infrastructure sector must have at least 1 infrastructure construction investment project under the socio-economic development project of a ministry or branch, have a project approved by a competent authority, and be organized by a competent authority. finance, securities underwriting.
Foreign-invested enterprises must register for conversion into a joint stock company, and set up an IPO registration dossier through the advice of a securities company.
Methods of offering IPOs
Based on securities law, initial public offering (IPO) is allowed through the following methods:
Mass media, including newspapers, radio, Internet, etc.
Dutch auction (descending auction): is a form of auction when an item is offered for a very high price, even much higher than the actual value. The price will then go down slowly until one of the bidders accepts the current price.
Guarantee commitment
Service with the highest responsibility
Buy wholesale and offer to resell
Self-released
The legal procedures to participate in an IPO are complicated with strict and complicated sanctions, so each IPO often needs different companies to help. Specifically, in the United States, law firms / securities firms / auditing firms will stand to support.
What are the risks of implementing an IPO?
The maximum transparency of information makes it difficult for the company to control all the information released to the public and the consequences on the value of information.
The pressure to maintain the company's growth will increase due to investment from the market and shareholders.
Increased costs, including issuance fees, intermediaries, accounting, consulting, investment banking, etc.
Sharing and gradually losing control of the company's operations must be voted on by shareholders.
The Board of Directors and company executives have many responsibilities for laws, regulations, public reporting, etc.
In general, IPO is seen as a complicated financial process but brings many benefits. The value that an IPO brings is not only within the business but also with investors in the market. An IPO is the first step for a business to disclose the value of its financial performance.
What is IDO?
IDO is an acronym for Initial DEX Offering – Initial coin offering on DEX.
DEX here stands for Decentralized Exchange – Decentralized Exchange.
How is IDO different from ICO, IEO?
In essence, the forms of ICO, IEO or IDO are the same, with the same purpose of releasing the project's token to the public for the first time. However, all three forms have some key differences.
– ICO (Initial Coin Offering): This is the first form of coin issuance of the cryptocurrency market. ICO is different from IPO in the traditional market in that: the project can raise capital from the community even though the product has not been fully developed, sometimes it is just an idea presented in the whitepaper.
– IEO (Initial Exchange Offering): Like its name suggests, this form is implemented on the platform of an exchange. In contrast to an ICO, an IEO is managed as well as a reputable representative by a cryptocurrency exchange for a startup seeking to raise funds with the issued tokens.
– IDO : As mentioned above, IDO is also issuing coins on the exchange, but the floor here is the DEX.
What is the purpose of IDO?
On the side of investors
Users can buy and hold tokens of potential projects through IDO. If you are lucky, the token can increase in price many times after the first sale, bringing huge profits to investors.
On the project side
Mobilize capital from the community to develop their projects.
If you choose a popular DEX, the project will be widely promoted in the exchange's user community.
Build a relationship in the ecosystem of that DEX, can cooperate with similar IDO projects.
Towards DEX
Attract traffic and increase trading volume for the exchange.
Build ecosystems and relationships with potential projects.
Increase the reputation and popularity of the floor.
How to join IDO?
Depending on the project, which DEX will IDO on. Some projects will require users to whitelist before opening for sale. In general, the project will inform and guide how to buy IDO for users.
Today's popular IDO platforms
Polka starts
Polkastarter is definitely the hottest IDO platform right now. Projects opened for sale on Polkastarter all help investors make huge profits, x many times the account.
The highest profit that investors get if they buy IDO on Polkastarter and "sell at the top". Source: Twitter Kyros Ventures
However, in the future, the number of people who want to buy IDO is too large, the requirements to buy IDO on Polkastarter become more and more difficult.
To prepare for Polkastarter's IDO, readers can see related articles of Coin68 here:
Bounce Certified
Although IDO projects on Bounce Certified are few, they also bring high profits to investors. Such as Umbrella Network.
Bounce Certified overview. Source: Twitter Kyros VenturesProfits of IDO projects on Bounce Certified. Source: Twitter Kyros Ventures
FalconSwap
FalconSwap is also the IDO platform that has attracted attention in recent times.
Gourmet Galaxy (GUM) is a hybrid project combining NFTs (Non-fungible token), Yield Farming and Gamification. Recently, IDO GUM on FalconSwap has received attention from the investor community.
Conclusion
IDO is a form that is not too strange in the community but still brings new things. If you are an investor with the desire to find potential and profitable projects, or simply want to participate in the colorful cryptocurrency market, you should definitely not ignore the form of IDO.
However, the cryptocurrency market is always high-risk. Just invest with a moderate amount of capital and follow your own strategy.
