what is an initial public offering (ipo)?
an initial public offering (ipo) is a company's first sale of stocks, bonds or certificates of deposit to raise funds for the issuer. for more information, please refer tour website customer support center – ipo subscription.
what are the risks associated with ipo?
over-subscribing to an ipoipo may be oversubscribed. the company may go through an allocation process to determine whether an investor will receive any shares and, if so, in what quantity. an investor may be tempted to subscribe for more shares than he intends to, if he thinks he will not receive the full amount in case of an over-subscription. however, if the ipo is not oversubscribed, the investor will receive all the quantities applied for and will incur the full cost.
market riskshare price may fluctuate from time to time or it may drop below its initial offer price on the first day of listing.
company riskit is vital to understand the company and business you are investing in. investors should study thoroughly the prospectus, financial report and even seek professional advice before making the investment decision.
delayed or suspended riskapplicants will also need to pay the handling fee and/or interests even though an ipo has been delayed or suspended for any reason.
ipo margin financing (margin)?the chance of shares allotment is often affected by the market feedback. large subscription volume will increase the allotment opportunities. through ipo margin financing service, you can subscribe more ipo shares using the capital in hand. the margin ratio of subscription for ipo listing on the main board can be as high as 90%, which means our clients would only need to pay 10% of the subscription fee in cash. if the distribution of shares is more than 10% of the total subscription, the customer is required to pay the excess amount on the previous trading day prior to the listing (the amount of credit may vary depending on the individual stocks). for details, please refer to our website customer support center - ipo subscription.
how to calculate ipo margin interest and starting date?margin interest will be calculated from the closing day of subscription until the trading day before the listing date, clients are required to pay the margin interest on the full amount of margin loan regardless of how many shares have been successfully allotted.
