In the stock market primary offering is only addressed to certain private investors, usually institutions. These operations are not publicized because potential investors are contacted through an intermediary. The public offer, however, has as its purpose the distribution of the bond to a wide audience, this offer is very expensive because the information requirements and promotion costs are higher. Do not underestimate is the indirect cost resulting from the fact that the major competitors of information benefits the issuer.
Public offerings differ in seasoned offerings and initial public offerings are offering.Le first realized when the capital of companies already listed that have a solid reputation in the second case the offer is not for the first time issuer have the confidence. The intermediary, in this case, plays an important role as his reputation may help in placing the titles. In the second case of an offer the company that offers it must first apply for admission to trading on the stock exchange since this is the company is exposed, in a conscious way, in comparison to other companies already on the market.
The commitment given to the market is very strong and that is why corporate bodies must carry out a preliminary analysis of costs, risks and benefits of listing. To do this analysis, the company should benefit from various professionals including the agent has a key role. It must know the company and collaborate with business leaders for the operations of determining technical issue, the control of the adequacy of the information, and presentation of the operation in the main centers. A company can be listed for several reasons: institutional, strategic or financial. The first to create a market that provides a reference price for their actions and to assist members in the liquidation of its units. This listing makes it easy to business succession in the event that the entrepreneur founder wants to retire and has no heirs to continue his work. The financial reasons are to reduce or stabilize the cost of capital through:collection of funds for future investments diversification of funding sources
positive effects on the credit standing: a positive image of the company may have a positive impact on the cost of net debt.
The strategic need to improve relations with the financial community and thus to increase prestige. Usually in the admission prices (listing) is made in the country most interested in the product, in other cases the listing is done to address directly a competitor. There are also perks as the request for listing on a given country requires the company's desire to engage seriously in the state, and therefore serves to deter protectionist measures in the country that hosts it. A takeover bid, the main feature is the origin of the title as they can be offered or sold to new investors or who are already in possession. In the first case we speak of OPS (public offer for subscription) and occurs when the extraordinary general meeting of a company decide to increase the capital reserve the right to subscribe to new investors. This type of offer is a favorite from the market as the liquidity remains available to the company. The IPO (public offering) are made by members of the company who sell their shares. Usually this is because the investor wants to partially disengage from the corporate life while continuing to hold shares of influential companies. Sometimes these two types of offerings are combined together: part of the new securities are offered to members and part of the new investors. Another useful feature to characterize the initial offer is the geography of the market you want to allocate it, because the Company may offer or a single market or various markets (which happens often). The Global Offering is when the entire placement is divided into pieces for each person to a specific market. These offerings, in recent years have taken hold in corporate strategies as more and more strong is the need to diversify their emissions.
What is the secondary market traded securities already in circulation. The purchase and sale transactions can take place in regulated markets that do not.
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