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What is a confidential IPO and is general public allowed to participate in it?

Lately there have been a lot of confidential IPOs. A recent example being the Duck Creek Technologies IPO. I try to follow the IPOs closely and I didn't see this one show up for participation through normal channels on E-Trade, or probably I missed it. It just showed up directly for trading on August 14.

Here is how the news reads (Duck Creek Technologies Prices Initial Public Offering):

BOSTON, Aug. 13, 2020 — Duck Creek Technologies, Inc. (“Duck Creek”), a provider of SaaS-delivered enterprise software to the property and casualty (“P&C”) insurance industry, announced today the pricing of its initial public offering of 15,000,000 shares of its common stock at a price of $27.00 per share. The shares are expected to begin trading on the Nasdaq Global Select Market on August 14, 2020 under the symbol “DCT.” The offering is expected to close on August 18, 2020 subject to customary closing conditions. [...]

How can offering close on August 18 at $27 if the stock is already trading on August 14 at $44.50?

Further googling on the subject shows that the company filed for a confidential IPO.

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The IPO's Closing Date refers to when the company receives payment for the shares in the IPO.

If the underwriters exercise their option to purchase more stock at the IPO price then settlement for this is called the Additional Closing Date.

A confidential IPO has to do with the amount of disclosure to the public prior to the IPO. Google for details.

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  • Any chance you can help me in putting some perspective with the example I shared of Duck Creek. IPO was conventionally supposed to be for participation. Are confidential IPOs allowed to directly go to market without even allowing an application for participation from general public? – Nik Aug 16 '20 at 4:05
  • I used to do a lot of IPOs but it has been some time since I've done any. The confidential IPOs is a newer wrinkle (the past 10 years or so) and I'm not familiar with anything more than the basic definition of what they are. I'd suggest that you look at the prospectus and see who the underwriters are and their allocations. That might give you a clue as to who the participants were. Sorry but I can't offer much more than that since I have no experience with them. – Bob Baerker Aug 16 '20 at 4:12

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