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Simcountry is an Online Digital World where you are the President of a country.
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Most Valuable Corporation Ever (Golden Rainbow)

Simcountry: Simcountry Bulletin Board  Most Valuable Corporation Ever (Golden Rainbow)

sfo Treasurer (White Giant)

Thursday, June 26, 2008 - 08:12 pm Click here to edit this post
It is always the case that market value declines immediately following an IPO. Usually about a 75% decline. This slowly reverses itself and starts an upward climb back to near it's previous vicinity (if managed properly). I have done literally 1000 IPO's and have NEVER seen market values rise immediately following an IPO, it's the exact opposite really.

I hope no one is confusing share price with market value. These are two totally different areas. Market price is garnered by interest from other entities in obtaining shares of your corp. Has nothing whatsoever to do with market value. Market value has to do with the profitability and assets of the corporation itself.

It had to be a temporary glitch if this is dealing within the constraints of an IPO. The share market model is set up to reduce the market values of the corporations that offer an IPO. As I have stated, in my experiences ranges from 60% to 80% of it's previous value.

The better question to ask is WHY does the market value drop so significantly when the profitability and assets haven't really changed between the time you decide to IPO and when it actually sells off some of it's shares. This question could open up a rather large discussion regarding the economic model which I plan to address in the upcoming Jozi chats.


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