Abstract
When a company decides to sell stock for the first time (to "go public"), this operation is called Initial Public Offering (IPO). The target of the IPO is to: - Raise capital for the company and enable the first investors to realize their investment (VC Firms). The IPO practice requires the intervention of both company and investors, and specialist advisers. Furthermore, the IPO process implies many considerations that overtake the obvious gain of liquidity operated by a company, once the stock is traded to the public. It is a really complex procedure for entrepreneurs. With these benefits come costs which are classified as direct (auditing and underwriting fees) and indirect (time dedicated to carry out the IPO process, ?under-pricing', the gap between the offering price and the stock value in the market, soon after the initial sale to investors). Actually, if direct costs (the ?spread', received by underwriters) can be precisely evaluated, the reasons for ?under-pricing' are much more ambiguous. We will explain first, the most influencing steps of an IPO process, in order to analyze the ins and outs, and identify the different actors of that complex procedure. This accurate description will help us then to take a critical stand on the different approaches of the IPOs ?under-pricing'.
