Initial Public Offering or IPO is a financial operation which aims to sell the shares of a company on a stock market. Thus, it helps the company, whether large or small, to open its capital to new investors (notably institutions, individuals or employees). The aim is to provide them with financing for their projects, accelerate their growth or develop their reputation.
Why go public?
Listing a company on the stock exchange means deciding to raise capital on a stock market. Read more in tesla stock. In fact, depending on the status and objectives of the company, three situations may arise:
The first relates to the company's desire to make new investments without recourse to its current shares or bankers.
The second concerns the company's desire to limit its indebtedness. Indeed, it should be remembered that it is on the balance sheet of the funds it owns and not in debt.
The last situation relates to the company's decision to open its capital in order to attract new investors. In this case, it offers its current shareholders the possibility to exit the company in whole or in part.
How to go public?
There are a number of procedures involved in going public. These, through the manoeuvres of the investment services provider (ISP) handling the IPO, must respond as much as possible to both the characteristics of the company and the state of the market.
The open price offer (OPO), considered the most popular of the procedures, involves the company seeking to be listed on the stock exchange defining a financial structure that will be responsible for constituting a "banking syndicate".
The firm price offer (FPO), it is a matter of the company and the financial intermediary defining the number of shares already on the market as well as their selling price.