The decision to go public: the case of Tesmec S.p.A.. Review of IPO pricing assumptions and analysis of post IPO market reactions.

The present dissertation is aimed at explaining what is an Initial Public Offering (IPO), and at disclosing the main reasons why a Private Company decides to becomes a Public Company. Resorting to a case study, the paper will afterwards analyze the process of evaluation of the company in order to define the Price Range.
After a general overview on the IPO, the decision to going Public will be analyzed and commented, with an analysis methodology (SWOT analysis) also being proposed.
To better understand how an IPO is actually carried out, the involved parties in the operation will be presented, and their roles and importance clearly explained.
Then the main stages of the IPO process will be sequentially described and the critical issues will be looked at in detail. The paper will also highlight the importance of the Secondary Market where the shares will be traded after the initial sale.
After that, a case study will be introduced: the IPO of Tesmec, and this case will be used to draw generalized conclusions of our analysis.

We will start with a description of the main methods of evaluation of a company and for each method Tesmec’s hypothetic Price Range will be calculated.
Then the Price Range obtained will be compared to the one reported in the International Offering Circular of the Company in order to assess its accuracy.

Finally, the after market of this IPO will be examined, together with the possible causes that led to an unfortunate result.
A correlation analysis with the results of other IPOs of Italian companies in the same period will conclude the examination of the case study and will give an additional opportunity to supplement the conclusions.