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Malaysia Stock Picks: How to spot a good IPO and a bad IPO in ...
11 May 2012
I can't help but to mention one classic example of Vastalux Energy Bhd. In 2008, Vastalux stocks were undersubscribed and since its listing the share price hasn't climbed any higher than its IPO price and is currently facing ... http://malaysiastockpicks.blogspot.com/ 1 11 May 2012
How to spot a good IPO and a bad IPO in Malaysia
Here is a guide to spot a good Initial Public Offering (IPO) and a bad IPO in Malaysia. Whether you are looking to subscribe for flipping for first-day gains or to hold for the long run, understanding why companies go for IPO is equally as crucial as looking for pertinent points that will increase your chances of striking a good deal and avoiding a bad one.
Why Companies go for IPO?
All companies listed on the stock exchange have one common interest in mind – to raise funds. Initial Public Offerings is the company’s first time raising funds selling its stock to the public.
Fund are raised either for business owners themselves as they cash out from the company or for the company as they issue additional shares and sell them to the public.
As we all know, another alternative for raising funds is debt. Debt and borrowings have to be repaid, whist capital raised through IPO doesn’t. This makes raising capital an interesting affair for any company established in Malaysia.
Why does the general public always associate IPOs with huge