Public offering

An IPO in which a company sells its unissued securities and receives al the proceeds in the form of additional capital is called a primary offering. A securities sale in which securities held by the owners of the company are sold, and from which the owners receive the proceeds, is called a secondary offering. IPOs are almost always primary offerings, but may include a small number of shares by the present owners.

The most important question a CEO should ask is, ! “Why do I want go public?”!

Why am I going public?

Some of these reasons are:

Raise money for expansion

Increase market value

Acquire other companies

Liquefy personal holdings

Attract and retain employees

Create an tax-planning strategy

Enhance the company’s reputation 20