English Deutsch Français Italiano Español Português 繁體中文 Bahasa Indonesia Tiếng Việt ภาษาไทย
All categories

a) the general public

b) institutional investors

c) managers and employees of the firm

d) creditors of the firm

2007-04-23 01:05:03 · 2 answers · asked by roaring_leo 2 in Business & Finance Investing

2 answers

By definition, an initial public offering makes shares available to everyone.

So the purest answer to your choices is "all of the above" but the gist of the question points to "(a) the general public" because it is only after an IPO that the general public can be privy to share purchase, whereas the other folks (b-d) have a shot at preferred shares of the company before it goes public.

I hope this helps you, and good luck!!

2007-04-23 03:14:58 · answer #1 · answered by alien~ 5 · 1 0

All of the above.

IPO -- or Initial Public Offering -- is when a private company goes public and sells shares that will be traded in the secondary market.

Typically, about 15-30% of the firm is sold to the public -- with insiders holding onto the other shares.

1. In theory, the shares are sold to the public. If you can only give one answer -- this is it. In practice, the other responses are better.

2. In the US, the allocation of most of the shares being sold is left up to the Investment Banks that make up the syndicate that brings the firm public. They tend to allocate to their best clients (since IPOs are usually underpriced). This means that institutional investors get the lion's share of the new issue.

3. Managers and employees of the firm usually get stock options at this point, but could buy shares at IPO.

4. Many companies reserve part of the IPO for creditors and strategic partners. This was particularly true during the dot-com boom in the late 1990s. However, shares sold to these groups usually constituted a concurrent private offering, rather than a public offering.

2007-04-23 11:48:28 · answer #2 · answered by Ranto 7 · 0 0

fedest.com, questions and answers