Frequently Asked Questions
What is Direct Listing?
When companies raise funds from the public markets for the first time, it is called an IPO. In a traditional IPO, Investment Banks act as a broker/middlemen between the companies and the investors. These brokers are the underwriters and create a market for the company shares in addition to other services. This is all prior to the company shares getting listed on the exchange such as NASDAQ or NYSE.
Direct Listing, on the other hand, is an alternative listing process of company shares. Here companies bypass typical underwriting processes and instead list on the exchange directly. Many companies such as Coinbase, Palantir, Sofi, etc. have chosen to list directly on the exchanges.
What does PrimaryBulls offer?
PrimaryBulls is a financial technology platform connecting companies seeking fundraising in capital markets to investors. Our platform enables companies to reach individual investors and wealth managers directly. It also lowers the cost of their fundraise significantly in both traditional IPOs and Direct Listings.
To the investors, it enables them to participate in new IPOs on equal terms with the institutional investors and large banks.
Can anyone participate in IPOs through PrimaryBulls?
All investors can participate in IPOs through PrimaryBulls. The only exceptions are investors associated with a broker dealer, their immediate family members or directors of public companies, etc. as defined by FINRA Rules 5130 and 5131.
Like common shares, investment in IPO shares too is considered speculative and risky, and may not be appropriate for every investor. PrimaryBulls provides details of the IPO including forms and filing with SEC, the financial disclosures, etc. Investors can review the company disclosures and filing details prior to investment in any specific IPO.
How can I invest in IPOs?
You can participate in IPOs on primaryBulls by following these steps:
Review company and disclosures
Register an Interest/Place Order
PrimaryBulls will followup on share allocation and deposit into your choice of account (PrimaryBulls or your linked brokerage account)
Note: IPO/Listing price may change from the initial price/range at the time of registering an interest. PrimaryBulls customers can edit or cancel their orders until after final IPO pricing.
I did not receive the total number of shares ordered?
The allocation of shares is dependent on the orderbook and demand. When demand in orders for the number of shares is greater than the total number of IPO shares, the allocation of shares may be reduced for customers. Customers may get the full number of shares requested, a partial amount, or none at all. PrimaryBulls ensures all customer orders are treated equally (as long as they meet investment conditions of the IPO company. For example: minimum order criteria if specified).
What is the "flipping" and how does it affect allocation?
Flipping implies selling IPO shares within a few days of receipt (often for a quick profit) after the IPO listing date. IPO companies through PrimaryBulls platform may discourage flipping by limiting/not allocating IPO shares to customers who have flipped shares in the past. See the SEC's Investor Bulletin to learn more about "flipping" and investing in an IPO.
Are there any fees or commissions for purchasing IPO shares through Primary Bulls?
No. There are no commissions or fees when investing in an IPO company through Primary Bulls platform.
Allocation implies setting aside shares for particular investors. Allocation process differs based on the IPO company criteria or sometimes their underwriters. Underwriters typically allocate to their institutional clients over any other investor orders. PrimaryBulls eliminates this allocation discrepancy and ensures fair and equitable distribution to any investor.
Conditional Offer to Buy (COB)
This is a request for IPO shares. By placing a COB, you’re asking for the opportunity to purchase your desired quantity of shares at the IPO price. An investor may place, edit, or cancel a COB after the initial price range is published and before the confirmation period ends.
Initial public offering (IPO)
An Initial Public Offering (IPO) is one way for a private company to become a public company. Once a company is public, the general public can buy their stock. In the process of going public, underwriters help decide what price the company's stock should be. The proceeds from selling shares go to the company, allowing them to raise capital.
The first and most detailed part of a company's IPO filing. This includes information about their business, finances, and the offering.
The primary market is where investors can buy newly public shares in a company.
The secondary market is where reselling occurs. Stock exchanges are secondary markets.
The company that's going public and issuing shares.
The estimated price per share for the IPO. It gives investors a general idea of what the IPO price might be. The price range may change during the IPO process. The final price is available the night before the IPO is complete.
Also known as the "public offering price” or “IPO price." This is the final price for shares before the company goes public.
Note: The opening price on the secondary market can vary from the list price since supply and demand determine the price.
Before the IPO listing, investors will have time to enter, cancel, or edit their shares bid (or order). PrimaryBulls will IPO details and notifications will provide information on the Last Date/Time to make any changes. After that point, you can't adjust your bids and they become confirmed orders. PrimaryBulls also offers an order preference during bid/registration of interest that helps investors manage their orders in an automated way in event of IPO price change.
The investment bank or group of banks that helps a company go public. The banks help establish the price range, facilitate the company valuation, and write the prospectus.
IPOs can be risky and speculative investments, and may not be appropriate for every investor.
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