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Initial public offering |
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Initial public offeringThe first offering of a company's shares to the public known in the UK as a flotation. IPO was originally an American term but is increasingly being used across all world markets The shares offered may be existing ones held privately, or the company may issue new shares to offer to the public.There can be lots of reasons why companies offer shares to the public:the directors want to raise new capital for the companythe directors want to widen the shareholder base of the companythe shareholders want to have a liquid market in which to trade their sharesthe directors want to be able to use 'paper' to make acquisitionsthe directors want the publicity that a public listing bringsIn recent years there has been a tendency for companies to list on the market by a private placing of shares to institutions rather than public offerings. This is partly because the costs of a placing are far lower than an offer for sale, and partly it is because in 1996 the Stock Exchange scrapped its rule requiring that new issues worth more than £50m should offer a proportion to the public.Whatever the reason, it rankles that members of the public are so often denied the chance to 'get in on the ground floor' while institutions clean up. The internet may reverse the trend, however. There have already been several online flotations in the USA and Europe in which private investors get full participation rights. These are sometimes referred to as EPOs (Electronic Public Offerings).One of the advantages of buying shares in IPOs is that they do not attract Stamp Duty (0.5% tax normally paid on share purchases) and since you can buy direct from the issuing company you can avoid broker's commission.Similar MatchesDual syndicate equity offeringDual syndicate equity offeringAn international equity placement that splits the offering is split into two branches - domestic and foreign - and each grantee is handled by a separate lead manager. Offering dateOffering dateDate on which a new set of stocks or bonds will first be sold to the public. Public securities offeringPublic securities offeringA securities issue placed with the public through an investment or commercial bank. Public offering pricePublic offering priceThe price of a new issue of issue at the time that the issue is offered to the public. Registered secondary offeringRegistered secondary offeringA reoffering of a large block of securities, previously publicly issued, by the holder of a large portion of some corporation through an investment firm. Further SuggestionsSplit offeringOffering statement Secondary Offering rights offering Offering memorandum electronic public offering Rights offering Secondary distribution or offering Competitive offering Blank check offering Reoffering yield Public offering Intrastate offering Offerings Underwritten offering Shelf offering Rights Offering public offering Offering scale Targeted registered offerings |
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