IPO Dates and Deadlines: What to Expect
Having a clear understanding of the IPO timeline and key milestones will put your client one step ahead of the game. In general, it can take about 35 days from the day a company registers their filing with the SEC to the day they go public.
KEY MILESTONES
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KEY MILESTONES
IPO TIMELINES
IPO TIMELINES
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KEY MILESTONES
FILING
DATE
PRICING DATE
TRADING DATE
CLOSING DATE
REQUIRED LEGAL OPINION
LOCK-UP PERIOD
The date when your client’s S1 or F1 is publicly filed.
Your client and the underwriter will agree on the price per share that will be used for the listing when the company goes public.
Trading commences on the designated exchange the day after pricing.
The closing date is two business days following the trading date. The shares will be delivered to the underwriter upon closing through DTCC (Depositary Trust and Clearing Corporation) and the registered holders will be established on the books of the transfer agent.
This can take a long time to finalize so it’s important for your client to think about this at the very beginning. The opinion must be in compliance with all regulatory laws and must ensure the following:
Once the IPO is complete, there will be a period of time after the company initially goes public when pre-IPO shareholders are not allowed to sell company shares. Traditionally, this was a six-month period, however companies have recently been using staggered schedules based on price targets, time, employment, etc.
› The company is validly existing and in good standing in its jurisdiction of organization.
› All outstanding shares are offered in compliance with the Securities Act of 1933 as
amended or pursuant to an exemption from the registration requirements of the 1933 Act.
› All shares are in compliance with applicable state securities or “blue sky” laws.
Alternatively, outstanding shares are “covered securities” as defined in Section 18 of
the 1933 Act.
› All shares are duly authorized, validly issued, fully paid and non-assessable.
FILING DATE
PRICING DATE
TRADING DATE
CLOSING DATE
REQUIRED LEGAL OPINION
LOCK-UP PERIOD
With the key milestones defined, it is helpful to get a feel for what a timeline might look like.
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To understand the timeline, it is important to realize the key milestones your client needs to hit as part of the IPO process:
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1 MONTH PRIOR TO PRICING
1 WEEK PRIOR TO PRICING
1-2 DAYS PRIOR
TO CLOSING
CLOSING
1 WEEK AFTER CLOSING
LOCK-UP PERIOD ENDS
At least one month prior to pricing, your client will need to work with their transfer agent to obtain and review drafts of all appointment documents, transfer agent agreements, and any applicable fee schedules. Typically, the transfer agent would work with your client and their legal counsel team to finalize the documents and obtain the new client fact sheet to start the internal setups for the newly public company.
All approved appointment documents need to be executed and submitted. As pricing has not yet occurred, submission of draft closing documents is required for review, along with the draft mass issuance file (with registration details only). Note, the final mass issuance file needs to be submitted with the letter of instruction for issuance immediately following pricing.
Your client’s transfer agent will confirm all agreement signature pages are obtained and will now hold in escrow. Here the transfer agent also obtains all executed closing documents.
The transfer agent will actively participate in the closing call. They will also transfer the offering shares to the underwriter’s DTC account, send wires/checks for selling shareholders (if applicable) and prepare final execution of all agreements as well as releases from escrow. The final mass issuance file is required with shares, cost basis and applicable legends.
The transfer agent will receive and review the final mass issuance file, along with a letter of instruction for issuance, and create shareholder accounts with shares loaded to each account. Within 5-7 days of share issuance (and with company approval of proof documents) shareholders will also receive welcome letters and restricted transaction statements mailed by the transfer agent. Information about the lock up period will be communicated and the transfer agent should assign a client service team to support your client’s account going forward.
Your client can prevent pre-IPO shareholders from selling shares immediately after closing by imposing an underwriter lockup period. This lockup period ensures shareholders maintain ownership and help keep the stock price steady. Once this lockup period date has expired shareholders are able to trade freely on the market, however insiders may still have restrictions. On that date the transfer agent will be instructed to remove the lock up restriction from all the shares. The transfer agent will oversee this process to ensure the shares (that are without restrictions) are available when the market opens on the expiration date.
IPO TIMELINES
It is important to note that no two IPOs are the same, and timelines can vary based on many factors. The below is intended to demonstrate how quickly the process can move and the moving parts that need to be accounted for from a shareholder perspective.
LOCK-UP PERIOD ENDS
1 WEEK AFTER CLOSING
CLOSING
1-2 DAYS PRIOR TO CLOSING
1 WEEK PRIOR TO PRICING
1 MONTH PRIOR TO PRICING
Get in touch to learn how Computershare can help you and your clients IPO intelligently.
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Get in touch to learn how Computershare can help you and your clients IPO intelligently.
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