FINA 3303 Chapter Notes - Chapter 3: Dark Liquidity, Algorithmic Trading, Initial Public Offering
22 Mar 2016
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Investment bankers are hired to manage the sale of new issues of equity to the market: this is called the primary market, trading of already issued equities occur in the secondary market. Fewer obligations to release financial statements and other information to the public. Gives flexibility to pursue long-term goals without the pressure of shareholders. Private placement primary offerings in which shares are sold directly to a small group of institutional or wealthy investors. Discounts to price are often taken due to lack of liquidity. Initial public offering first sale of stock by a formerly private company: seasoned equity offering is the sale of additional shares in firms that already are publicly traded. Underwriters purchase securities from the issuing company and resell them to the public: determine the term on which it should attempt to sell the securities. Prospectus a description of the firm and the security it is issuing (cid:1) (cid:1)
