How exactly a company goes for an IPO? What are the expected requirements to go IPO?

Answer 1

There are various stock markets. Wall Street and Nadaq are two different markets. Each market has different requirements to enter. An American company doesn't have to trade on the American exchange. If they can't make the requirements for the exchange they want to be on, they can litterally sell the stocks over the counter. You walk up to the desk and literally ask to buy shares. Some companies make mini markets with these shares called bulletin boards. These are formed so the owners can get the buy and sell fees like a normal broker. This is also where most "penny" and "less than penny stocks" stocks are traded. Then they have to sign in with the SEC. Private companies can give the SEC the finger and that's one reason public companies go private. Then they determine how many shares, who gets what shares and give an estimated price on the shares. The estimated price is the big deal for them, because it's that price that the company is going to get their real money so they do not want to start the bid too low or they will lose out and if they set the price too high they won't get as many takers (because they wouldn't be able to quickly sell the shares at an even higher price to make their profit) and stock will be left "on the table." This is not the typical auction. There are different "winners" with different prices although generally they do not go much beyond the biggest purchaser (because when it goes public, it might not be much higher than what the person paid for it).

Answer 2

The link below will answer all of your questions. Ivo Welch (now at Brown University) is one of the premier IPO researchers. He maintains the IPO Resource Page.