What is the difference between Follow on Public Offer and Secondary Market?
Cordelia asks:
when a compnay goes to public for first time is called IPO. After it’s shares traded in secondary market.
when a compnay goes to public for first time is called IPO. After it’s shares traded in secondary market.
Why companies again go for FPO and how it differciates to the Secondary Market?
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A follow-on public offering (usually called an SEO — or “Seasoned Equity Offering”) is when a public company creates new shares and sells them to the public. It is a primary offering (meaning that it is the first time those shares are sold). Secondary market trades occur when someone other than the company sells shares that they already own.
Companies will issue SEOs in order to raise more funds. Money from shares sold in the secondary market does not go to the company — it goes to the person who owned the shares.