Summary and opinion Research Paper Example | Topics and Well Written Essays - 1500 words

Summary and opinion - Research Paper Example Bankers state that pricing an offering for the company to register quick gains once the trading begins is the best approach. This is because the strategy enables the company to improve its relationship with the big investors while at the same improving the reputation of the company in the market. However, too much of hype is detrimental to the success of the company in the market. This is because the investors who buy the shares during the first week are likely to sell them very quickly in order to make high returns. In order to avoid a runaway stock, the company should control the number of shares it offers in the market. This is to reduce the demand which might increase the prices. In addition, the company should control the information being released in the market to avoid creating unrealistic expectations among the investors (Raice, 2012). Some companies might prefer to raise as much money as possible once they introduce the shares in the market. This approach can work with investors who are likely to be patient. However, there is a high risk that the prices of the shares might decline in the first weeks of trading. Therefore, creating a strong investor relationship is very important in securing the future of the company. Therefore, the company should communicate effectively, observe the ethical standards, comply with the set rules, and audit its operations in order to identify the need to make changes (Raice, 2012). With the entry of the internet in the market, it is becoming very hard for the companies to control the pop associated with entering in the stock market. However, companies need to audit their books in order to know their worth before releasing the information to the market. This is to ensure that they have a strong base to support their operations in case the shares fail to raise the expected amount of money. This has seen many companies fail to reach the target as many of the initial