Accessing the stock market debut of a company used to be reserved for large funds and institutional investors. With Bitso, you can now participate in US IPOs at the offer price, directly from the app. Here's how it works.

What is an IPO?

An IPO (Initial Public Offering) is the process by which a private company offers its shares to the public for the first time. It's the moment a business goes from being privately held to trading on the stock market, and anyone can access it.

Have you ever seen a company's founders ringing the bell on Wall Street? That ritual marks exactly that moment: the company makes its stock market debut and its shares become available to the general public.

Before an IPO, only institutional investors like venture capital funds or large investment firms have access. With the IPO, that opportunity opens up to everyone.

How does it work in Bitso?

Participating in an IPO on Bitso is simple. We do it through Alpaca, our regulated partner in the United States that gives us access to the primary US IPO market.

The process is as follows:

1. Find the IPO you're interested in in the "Markets" section of the app. Before participating, you can review the company's information: its business model, leadership team, financials, and more, in the public prospectus available on the same screen.
2. Enter the amount you want to allocate in USD and submit your request.
3. Wait for the allocation. Close to the IPO's start, the available shares are distributed among all applicants. We'll notify you with the result: you may receive all the shares you requested, some of them, or none, depending on demand. If you don't receive everything you requested, the unallocated amount is automatically returned to your account.

The first time you participate in an IPO, you'll need to confirm some regulatory requirements. It's a quick process.

What is the allocation?

When you participate in an IPO, you don't purchase shares directly the way you would with a stock that already trades on the market. First you submit a request with the amount you want to allocate, and close to the IPO's start the available shares are distributed among all applicants.

The result can be one of these three:

• Full allocation: you received all the shares you requested.
• Partial allocation: you received some of them. The unallocated amount is automatically returned to your account.
• No allocation: you didn't receive any shares. Your full amount is returned to your account.

The allocation is a random process. It doesn't depend on the amount you requested or your history on Bitso, but on total demand and the shares available for that IPO.

What happens to my money?

When you submit a request to participate in an IPO, the amount you entered is held in your account until the allocation result is known. You are not charged anything until that moment.

Once the allocation is defined, here's what happens depending on the result:

• Full allocation: the full amount corresponding to the shares received is debited.
• Partial allocation: only the amount corresponding to the shares you received is debited. The rest is automatically returned to your USD account.
• No allocation: the full amount is returned to your USD account.
• IPO cancelled: if the company decides to withdraw its public offering, the full amount is returned to your USD account.

Can I cancel or modify my request?

Yes, but only within a limited time window that is part of the IPO process. This window typically opens close to the start of the IPO and lasts 60 minutes. When it becomes available, we'll send you a notification so you can take action.

During those 60 minutes you can open the app and modify the amount of your request or cancel it entirely. Once the window closes, your request is confirmed and no changes can be made.

Important: The opening of this window depends on the IPO process and may vary from one 

What price will my order be executed at?

When you submit a request to participate in an IPO, you are not acquiring shares immediately. Your order is executed at the final offer price, which is confirmed close to the start of the IPO.

It's important to know that the offer price may differ from the price at which the stock begins trading on the secondary market once it makes its debut.

Risks to keep in mind

IPOs can be an interesting opportunity, but they also carry risks that are important to understand before participating.

• The price may fall after the debut. There's no guarantee the stock will go up on the day it starts trading. In some cases, the market price may end up below the offer price.
• Allocation is not guaranteed. You can submit a request and receive no shares if demand exceeds the available supply.
• They are higher-volatility instruments. Companies that have just gone public tend to have less public track record than established ones, which can translate into sharper price movements.

Only take part with what you're willing to risk.