Costs of an IPO?

[aa2202]

How much does it cost to go public? Can somebody please list some of the expenses involved with an Initial Public Offering? I know it's pretty much all legal fees but just wanted to here your guys' opinions.

[ethansmith]

As far as I know there are no real costs to the company other than legal fees, filing fees, and perhaps commissions/fees paid to the bank handling the IPO.

[aa2202]

Okay thats what I thought also. Thanks. Does anybody else have anything to say about my question? Answers are appreciated.

[DdotG]

I copied this directly, but it has some good info:
"The most obvious cost of having an IPO is the expense. It costs money to raise money. The legal fees, printing costs, and accounting fees associated with registering an IPO can run into the hundreds of thousands of dollars. On top of those costs, the rules for taking a company public are so complex that most companies have to hire experts to handle all the paperwork. And once the IPO has happened, the costs don't end. The SEC regulations on public companies mean that the CEO of the company will either have to devote a lot of extra time to dealing with those regulations (plus the demands of profit-hungry shareholders) or hire someone else to do it."

[akula]

yea ipo woot woot
if you qualify for listing, the costs are broken down as either direct or indirect
for an unseasoned issue, the largest direct costs are exchange fees (one time and ongoing) as well as the underwritting/roadshow fees
the largest cost, however, is the indirect cost...commonly known as ipo underpricing...meaning that with an unseasoned issue, the stock is typically offered on the secondary market at a 10-20% (or more) discount
erhhh...crap topic, too complicated
at any rate, for these reasons people also do back door ipos
anyyywayz, it all comes down to why is the ipo an option in the first place..is it an exit or a financing strategy?
because if it's either one, there are alternative options
meh