What are the ways of issuing shares?

  • Public issuing 

A public offering is the sale of equity shares or other financial instruments to the public in order to raise capital. The financial instruments offered to the public may include equity stakes, such as common or preferred shares, or other assets that can be traded like bonds.

Generally, the issuing company and the investment bankers handling the transaction predetermine an offering price at which the issue will be sold. The term public offering is equally applicable to a company's initial public offering (IPO), as well as subsequent offerings.

  • Direct Public Offering (DPO)

A direct public offering (DPO) is a type of offering in which a company offers its securities directly to the public to raise capital. An issuing company using a DPO can eliminate the intermediaries, such as investment banks, broker-dealers, and underwriters that are typical in initial public offerings (IPO), and self-underwrite its securities.

  • Private placement

A private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than publicly on the open market. It is an alternative to an IPO for a company seeking to raise capital for expansion. Private placements are relatively unregulated compared to sales of securities on the open market, and the company is usually not required to provide a prospectus to potential investors and detailed financial information may not be disclosed. 

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