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Public Offering of Shares (IPO, SPO)

Public Offering of Shares (IPO, SPO)

What is it?

The public offering of shares is offering and placement of securities on a stock exchange/regulated market through which the companies raise money via capital markets or simply acquire listed statute. 
The process relates to offering of shares, as well as hybrid instruments (convertible or exchangeable bonds, preferred shares). 

The process relates to issuers (companies, municipalities, banks, other) in respect to initial public offering (IPO), secondary public offering (SPO), capital increase and other offerings that shall follow the public offering procedure.

Shares

In an IPO a private company gets listed on a stock exchange and publicly offers new and/or existing shares for the first time, by offering:

  • New shares (Capital increase), issued to raise new capital, respectively the proceeds remain in the company. Capital increase is the way a public company may raise money to finance its projects (investment program, acquisitions, etc.), or to support its additional capital needs, or to improve its equity position; or
  • Existing shares (Secondary Offering), offered by existing shareholders. The proceeds remain at shareholders' disposal and thus shareholders monetize partially or entirely their investments in the company.

Advantages

  • Broader investor base
  • Additional financing source
  • Increased transparency and public awareness of the company

Whom is it suitable for?

  • Companies operating in an attractive industry with a good track record and prospective future earnings and growth potential
  • Companies needing financing for their investment programs or which are targeting acquisitions that need financing through new equity

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