How An IPO Works

How Do IPOs Work?

IPOs are incredibly complex and risky feats to pull off in today's regulatory environment. However, the following story does a first rate job of highlighting the key steps in a successful one.

How An IPO Works

A Cajun named Jean Paul moved to Texas and bought a donkey from an old farmer for $100.00. The farmer agreed to deliver the donkey the next day.

The next day the farmer drove up and said, "Sorry, but I got some bad news. The donkey died."

"Well then, just give me my money back."

"Cain't do that. I went and spent it already."

"OK then, just unload the donkey."

"What ya gonna do with em."

"I'm gonna raffle him off."

"Ya cain't raffle off a dead donkey!"

"Sure I can. Watch me. I just won't tell anyone he's dead."

A month later the farmer met up with the Cajun and asked, "What happened with the dead donkey?"

"I raffled him off. I sold 500 tickets at $2.00 apiece and made a profit of $998.00."

"Didn't no one complain?"

"Just the guy who won. So I gave him his $2.00 back."