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public. Such changes may also have tax implications that need to be taken into account.
Once the company is publicly held, the SEC sets limits in the sale of “restricted” stock, generally shares issued in private placements
and shares held by controlling shareholders. Existing shareholders may sell any portion of their holdings without technical restriction as part of
the IPO the only “restriction” then is a practical concern that the offering not be perceived as a bailout of existing shareholders.
However, if one of the goals of the public offering is to make shares of controlling shareholders salable in aftermarket advance planning can
reduce the impact of these SEC restriction Hensler, Rutherford and Springer, 1997 put in initial public offering by Richard P. Kleeburg
2005: 35
Initial public offering pricing fixed based on agreement between emittent company with underwriter. Important role of underwriter is
fixed the public offering price. For considering stock price fairness, underwriter have to pay attention how big the basic of company power,
how much the demand of stocks that will be offered and how big the power and weaknesses of market today. Underwriter have to set the fair
price for issuers and also attracted for investor Dalton, 1993 put in Bodie Zvi, Alex Kane, and Alan J. Markus 1996:243
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There are two things that need to get issuers attention in doing public offering for the stocks, which is when the offering will be did
and in what price the stocks will be offered. Both factors determine the succeed of issuers get the fund in capital market which signed with
selling all offered stocks Shahaluddin Haikal, 1996 Settlement of company stock price is a point that determine in
get the fund from stock public offering in initial market which is known as Initial Public Offering. In this step, company hasn’t have guidance
about beneficial capital market price for issuer or investor. Stock value have to refer to the real company value and monetary value which
wished will be got from IPO based company capitalization. To determine stock value, emission guarantor do earlier scoring which
usually compared with similar company emission which listed in stock exchange. Rating will be done with deeper analysis of financing
projection of issuer candidate. Stock price settlement in prospectus in huge amount that have
to paid by investor in stock offering time with using offering buying form through appointed bank. Settled stock price in offering period is
the real amount that has to be paid by investor. If there is a differentiate of stock price with the highest limit settled in offering, so there will be
cash back after maturity.