As a result of the country’s agenda, our economic knowledge has inevitably improved significantly over the years. When everyone talks about inflation, devaluation, interest rates, exchange rates, Entry into business He is now as equipped as if he had taken the lesson.

At Türkiye University we have now started discussing the issue of public offering. Participation in the classes is quite high, so By Daktilo1984, editor-in-chief and economist Enes Özkan Let’s hear what they have to say and look at the aspects of this public offering issue that aren’t often mentioned.

Before we move on to what economist Enes Özkan said, let’s briefly talk about what a public offering is.

We can define a public offering in its simplest form as follows: it is the sale of a company’s shares by raising a large number of previously unknown investors. So companies issue bonds via shares (financing). provides resources. There are three different methods of public offering, but let’s not go into detail about them so as not to deviate from our main topic.

Now that we know roughly what a public offering is, we can talk about why it’s so popular and whether there are any risks involved.

In the last two weeks alone, 600,000 people have participated in public offerings and this number is growing. Recently made ebebek Nearly 4 million people have requested the IPO, and it looks like this trend will continue.

In fact, those who view this situation from the outside He compares it to the cryptocurrency incident. Those who get tips from their spouses or friends that they have earning potential enter the stock market to earn easy income. The population’s low financial literacy and the fact that current economic conditions are pushing people to try ways to make “easy” money are also factors.

In these economic conditions, companies enter the stock market just as a new venture enters crowdfunding It is also said that the stock market cannot bear this burden. There are also those who say that many companies could go bankrupt at this rate and that the IPO is the last exit before the bridge.

Under normal circumstances, public offerings should be made by companies with strong resources and a successful business model, as often works abroad. They don’t come in to pay off debt, but to expand into new areas. Tesla participated because it was an expensive company. was at the breaking point but because its model was successful, it became the most valuable car company.

Let’s take a look at the number of companies on the 2023 IPO calendar and trader Barış Büyüktaş’s comments on this topic:

Now let’s include economist Enes Özkan’s thoughts on this topic:

What Barış wrote in the tweet above is partially true. Really There are companies that view a public offering solely as a means of debt financing. Because although profitability seems to be very high lately, high profits in the Turkish lira sometimes do not create a favorable environment for investments, due to both the lack of inflation accounts and the depreciation of the Turkish lira.

There are two things here:
First: Okay, the company may have debt, that’s okay; He will invest, he is looking for money. Why is he seeking this investment? Here he goes abroad, develops a new technology, etc.

These have now become very expensive in Turkish lira. Own profitability etc. may not be sufficient. There’s an aspect of it, so can attract investments for this, It may offer its shares to the public.

Latter mentioned: In fact, the company only raises investments for debt financing and this is the process of going public. This is of course the problem. no new investment plans Or of course they all say that they have a new investment plan, etc., but there are many companies that do not base this on a solid basis.

The second part here is the problematic part. Normally the stock market goes up. Actually They don’t want such companies to go public. Because they have to find a balance between a short-term benefit and a long-term benefit.

By now listing every company on the stock exchange, gathering short-term investors and then determining the long-term stock values ​​of those companies, The collapse of corporate values ​​has serious negative consequences for the stock market.

To avoid negative effects, these capital market authorities first carefully examine the situation. In our case, the Capital Markets Board actually has to do this. But in Turkey people somehow have excess savings, not to switch to foreign currencies or currencies that increase in value accordingly. Of course, there is a serious direction towards the stock market.

If people cannot buy their money’s worth; Even if it’s three cents or five cents, They try to avoid buying dollars, molars, euros, etc.

for him I view most listed companies with some suspicion. Currently, issues such as corporate equity adequacy, equity profitability, etc. are not in a very good situation in our stock market. There are still many such distressed companies. There are not only newcomers to our stock market, but also oldcomers.

People need to be aware of this. Stocks are not numbers on screens But because people see it as a tool for short-term investments, they consider it buying and selling, trading, etc. In fact, the long-term investment is the most logical and the one that will bring serious profitability in the long run.

For this, fundamental analysis must be done correctly. In other words, reading the company’s balance sheet carefully, knowing the company’s human resources, Full transparency of management and management strategy There are elements like.

When you buy shares, you really do You become a partner of that company. Stocks don’t mean; So you do this, there’s a number on the screen, it’s not going to go up or down. You are essentially a partner in the company and you now get a share of the profitability of that company. In fact, most companies used to be more like this. In other words, it offered several benefits to shareholders.

own shares, It means being a partner of the company. Of course, not every partner has so much authority in terms of management and control, but from a point of view it is really correct. In other words, going to the general meeting of that company and asking for accountability, there are many examples like this; In other words, stock market investors have attended the company’s general meeting many times.

Investors in the stock market make joint decisions and organize themselves during the company’s general meeting; After two years, they can take over the management of the company themselves. Sometimes big investors in the stock market do this. By organizing small investors It does, and sometimes small investors organize and do it. That is, until it comes to taking over the management of the company. This is serious business. So of course it also depends on the free float rate. In highly listed companies, after a while you can become the leader of that company, since you are a shareholder you have a say in the general meeting.

Of course, stock types play a role here, but this is generally the case. Therefore, shareholders need to know the share forms and psychology, and know that they are partners in that company. Knowing that the success of that business will impact their own financial well-being in the long run, For the stock market investor, it is best not to see this simply as a number on the screen, a name and a number combination in the bank account or the banking application.