What is an IPO and how does it work?

An IPO (initial public offering) is the process through which a private company offers its shares to the public for the first time and begins trading on a stock exchange. Before that point, ownership is generally held by founders and private investors.

How an IPO works

The company publishes a prospectus with information about its business, financial position, risks, and intended use of the proceeds. An offering price is then set, and the available shares are allocated among applicants. If demand exceeds supply, an applicant may receive a partial allocation or no allocation.

The offering price does not determine the later market price. Once trading begins in the secondary market, the share price can rise or fall.

How the process may appear in the app

If this feature is enabled for your account, the Bitso app serves as the access channel. Nvierto/The Badger Management House Independiente provides advisory services, while Alpaca executes the transactions and holds the securities. Availability, eligibility, and terms may vary by market and account; check the information shown in the app before submitting a request.

1. 01

   Review the offering

   Read the prospectus and review the available information about the company, the offering, its risks, and the indicated price range.

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2. 02

   Submit a request

   Enter the amount you want to request. At this point, you are requesting participation; an allocation has not yet been confirmed.

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3. 03

   Wait for the allocation

   You may receive the full amount requested, a partial amount, or no shares. The result depends on demand and the shares available.

What happens to the requested funds

The requested amount may be reserved while the allocation is pending. If the allocation is partial, only the corresponding amount is used. If there is no allocation or the offering is canceled, unused funds are released according to the terms shown for that offering.

Whether a request can be changed or canceled depends on the window displayed for the specific IPO. After that window closes, the request may be final.

Risks of participating in an IPO

• An allocation may be partial or unavailable.
• The market price may fall below the offering price.
• A newly public company may have less public history and experience sharp price movements.
• Product availability and eligibility requirements may change.