Once a company has decided to go public, it will evaluate the market to determine the best time to maximize its value. Timing the market is a major concern for pre-IPO companies because a lot of money is potentially at stake. In fact, about one-third of companies view timing the market as the biggest concern when considering an IPO. Because of the anxiety surrounding IPO timing, companies often look for market “windows” during which a public offering has a better chance of maximizing the valuation of the company.
This period of time, known as a market “window,” occurs when public investors are more receptive to purchasing shares in a newly public company. Hitting these elusive windows is a concern for many companies and can lead to major pricing setbacks if they are not prepared to act swiftly and execute the registration process when the right timing strikes.
This article will explore factors that can help companies to identify open market windows and will provide practical advice on how management can take steps to prepare for a pricing window and successfully time the IPO.