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Chapter 23) Part 2 (Initial Public Offering (IPO) (Advantages (Greater…
Chapter 23) Part 2
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Types of offerings
- Underwriter
- An investment banking firm that manages a security issuance & esigns its structure
Primary Offering
- New shares available in a public offering that raise new capital
Secondary Offering
- Shares sold by existing shareholders in an equity offering
Mechanics of an IPO
Underwriters & Syndicate
- Lead Underwriter
- The primary investment banking firm responsible for managing a security issuance
- Syndicate
- A group of underwriters who jointly underwrite and distribute a security issuance
SEC Filings
- Registration Statement
- A legal document that provides financial & other information about a company to investors prior to a security issuance
- Preliminary Prospectus (Red Herring)
- Part of the registration statement prepared by a company prior to an IPO that is circulated to investors before the stock is offered
Final Prospectus
- Part of the final registration statement prepared by a company prior to an IPO that contains all the details of the offering, including the number of shares offered & offer price