What happens during the post-effective date of an IPO?

Answer 1

During the post-effective date of an IPO, the company's registration statement becomes effective, allowing it to sell its shares to the public. The underwriters begin marketing the shares to potential investors, and the company usually conducts a "roadshow" to generate interest. Once the shares are sold, they start trading on the stock exchange, and the company receives the proceeds from the sale, which can be used for various purposes such as expansion, debt repayment, or working capital. This period marks the transition from a privately held to a publicly traded company.