Question 1

Would regulatory agencies besides the SEC need to approve this Clearing bid process? If so what agencies....

Accepted Answer

Thank you for your question John. Since our revenue model includes receiving a success fee contingent upon the conclusion of an underwriting, we were required to register at a broker-dealer with FINRA in order to receive these fees. That being said, we do not handle customer funds and all the KYC (know your customer), suitability testing and customer oversight is done by each participating broker with whom the investor's account resides. The SEC will remain the primary regulatory body oversee...

Question 2

How is your process different from the Dutch Auction IPO used by Google? Do you need all retail brokerage firms to partner with you to submit retail investor's IPO bids? What happens if my brokerage firm does not submit my bid to your process?

Accepted Answer

Great question! The short answer is that a Dutch auction determines the highest price at which all shares in the offering can be sold. Anyone who bids at or above the clearing price should be entitled to being filled at that same price. Google's offering was still discriminatory and highly restrictive when brokers, like Merrill Lynch, were asked to post letters of credit to participate! ClearingBid's proprietary pricing technology and algorithm allows us to determine the clearing price, simil...

Question 3

ClearingBid came recommended by Brownstone Research. There is a definite need to democratize the IPO process! With that said, Brownstone mentioned the company valuation was $13M. I see it here at an $18M valuation. Was it a simple mistake in Brownstone’s recommendation write u...

Accepted Answer

Thanks Jared. The confusion with this issue came from the Form C filing stating a $18M post-money valuation, which would translate to a $13M pre-money valuation (assuming that the full $5M is raised). Brownstone was particularly enamored with the valuation level since this is right on top of where we raised our last $3M in 2022-2023, with our Series A financing, at a $13M post-money valuation. The calculation is correct, but they each get there from a different direction! It remains to be see...

Question 4

On opening day some people are allowed bail out and others aren't. This is what needs fixed.

Accepted Answer

Great point John! This is commonly referred to as "flipping." When an IPO "pops" on the first day, after the initial pricing, clients are encouraged to not sell their shares immediately, and some firms will penalize those investors (who are lucky enough to be able to receive allocations in the first place) who do sell by not allocating them shares on another hot deal. This makes no sense; if a stock is up dramatically from its pricing, investors shouldn't be restricted from selling. The large...

Question 5

Placing an order with an online broker today requires a ticker symbol. Will brokers automatically recognize the company's ticker symbol of IPO that you facilitate or must you seek each broker's cooperation?

Accepted Answer

The symbols for new issues/IPOs will be automatically recognized and not require anything special. Typically, when filing the registration statement with the SEC, the company and its underwriters will request a symbol from the stock exchange, which is included in the filing for the market to see. In rare cases, a "when issued" temporary symbol may be issued. This will be published on ClearingBid's site with each offering that comes to market. So it's as easy as submitting a limit order, with ...

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