Minority IPO

AAA

DEFINITION of 'Minority IPO'

An initial public offering in which a parent company spins off one of its subsidiaries or divisions, but retains a majority stake in the company after issuance. This means that after the public offering, the parent company will still have a controlling stake of the new public company.

INVESTOPEDIA EXPLAINS 'Minority IPO'

The parent company may retain this majority stake forever or may slowly dissolve their ownership over time. This type of IPO allows the company to raise funds, accessing the value of the subsidiary, to fund its own operation or return value to shareholders.

VIDEO

RELATED TERMS
  1. Final Prospectus

    1. The final version of a prospectus for a public offering of ...
  2. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  3. Issuer

    A legal entity that develops, registers and sells securities ...
  4. New Issue

    A reference to a security that has been registered, issued and ...
  5. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  6. Subsidiary

    A company whose voting stock is more than 50% controlled by another ...
Related Articles
  1. Conglomerates: Cash Cows Or Corporate ...
    Investing Basics

    Conglomerates: Cash Cows Or Corporate ...

  2. Initial Public Offering (IPO) Explained
    Investing

    Initial Public Offering (IPO) Explained

  3. What are the differences between affiliate, ...
    Investing

    What are the differences between affiliate, ...

  4. IPO Basics Tutorial
    Retirement

    IPO Basics Tutorial

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center