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09-21-2003, 12:22 PM
Join Date: Mar 2002
Originally Posted by
Errrr.... not quite.
Money received from an IPO rarely goes into a cash account. Its initally used to pay debt, startup costs R&D.
Of course, this depends on the industry specific stock.
Well, I simplified... It's actually already quite complicated for the non-financially initiated (I had put a cost at first regarding the IPO but decided to slash it since it made things more confusing).
It still fits the purpose of explaining how a company can spend (or make provisions) even though they are making losses and why they are different (losses vs warchest) and should not simply be put as counterbalances.
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