Initial Public Offering (IPO) / New Issue
An initial public offering is the first time that a company has sold its stock to the public. The issuing company receives the proceeds from the sale minus the underwriter’s compensation.
Subsequent Primary / Additional Issues
In a subsequent primary offering, the corporation is already publicly owned and the company is selling additional shares to raise new financing.
Primary Offering vs. Secondary Offering
In a primary offering, the issuing company receives the proceeds from the sale minus the underwriter’s compensation. In a secondary offering, a group of selling shareholders receives the proceeds from the sale minus the underwriter’s compensation. A combined offering has elements of both the primary offering and the secondary offering. Part of the proceeds goes to the company and part of the proceeds go to a group of selling shareholders.
Awarding The Issue
InvestingThe primary markets are where investors can get first crack at a new security issuance.
InvestingThe secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
InvestingA secondary offering is the issuance of new stock from a company that has already made its initial public offering.
InvestingIn the primary capital market, investors buy directly from the issuing company. In the secondary market, investors trade securities among themselves.
InvestingA public company has sold stock to the public through an initial public offering (IPO) and that stock is currently traded on a public stock exchange.
InsuranceAn initial public offering (IPO) marks the start of a company's publicly traded life. Find out why companies undergo IPOs, and how the process works.
InsuranceInitial public offerings aren't the best option for every company. Consider these factors before "going public."