5. Sell, Sell, Sell!
On the day of the IPO, the exchange, whether it be the NASDAQ or the New York Stock Exchange (NYSE), will often have a ceremony to commemorate the event. Money from the institutional investors will go to the corporation, roughly equating to 92 percent of the agreed-upon value of the stock. The other 8 percent will go as commissions to lawyers, bankers, and accountants. The money the company receives that first day of the IPO is all it will see from the event; thereafter, all trading is done between investors in the stock market.
Bottom Line: The IPO is the pinnacle of money generation for a new company. It is a steep and rare hill to climb, and one that can make you rich.
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