Sunday, November 21, 2010 10:11:38 PM
When a company issues an IPO it is exactly as the name describes, and initial public offering. This is done when a private company goes public or wishes to give everyday investors an oppertunity to be shareholders in their private company. The underwriters of the IPO, the banking guys, offers the shares to investors for a set price that is predetermined. There is some legal paperwork that must be filed, which is too in depth for this discussion, and then individual investors are able to go through the selected underwriter to obtain shares of the company not on the open market.
According to the document, CVP plans to buy RNWF for $0.12 per share and upon closing RNWF will no longer exist but it will now be part of CVP. The current investors of RNWF who hold shares bought on the open market such as us on ihub will have 1 year to decide if they would like to take cash for their shares at $0.12 per share or to invest in the IPO of CVP. CVP is a company with $15 billion in assests. It could go public or stay private, this has yet to be disclosed.
I was lucky enough to get in on Krispy Kreme's IPO many years back as they went public and that turned out fantastic. I could only hope for lightening to strike twice.
Hope this helps and sheds some light on an IPO.
These are all just my opionins and is in no way intended to be investment advice. I am a NOT a professional trader. Good luck to all!
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