Hey! So how do you increase your number of shares you have when you file for your ipo at 1st? For example, if I filed for my IPO right now, I would only have 120,557 shares and it has been this way for awhile now. How do you increase this??
Hi,
if you make a profit, the number of shares should go up after your week-end payments. What is now (temporarily) booked as profit will be added to your equity.
When you go public, your equity is divided by 100. That gives the number of shares you will own after the IPO. Then 25% is added. These shares will be sold to the public. Mind you, investors don’t buy shares… they invest in your airline. Allow me to explain with an example…
Let’s say your equity stands at 12 million. When you go public, you will get 120.000 shares and 40.000 shares will be sold.
If people invest less than 2 million dollar, your IPO will fail.
If people invest more than 2 million, the IPO succeeds and all shares will be divided under the investors.
If people invest a total of 2 million dollar, investors will have paid 50 dollar for a share that is almost worth a hundred dollar.
If people invest a total of 4 million dollar, investors will get one share for every hundred dollar they invested.
If people invest a total of 8 million dollar, investors will have paid 200 dollar for a share that is worth just over a 100 dollar.
It is in your interest to find as much investors as you can. More investors means your airline gets more money. The 80% you own after the IPO will be worth more money than before the IPO.
It is in the interest of investors not to buy shares once 100% is sold. If they still buy shares, they will end up paying more than the shares are worth the day after the IPO.
Jan
ohhhm thanks! So basically your profit margin dictates the amount of shares you have available right?
so no, your equity does
Sorry if I wasn’t clear…
It is the value of your airline that dictates the number of shares. The system changes your equity once per week, when profit minus salaries is added to your equity.
Jan