How do public shares work? - Company going public?
I am getting confused on exactly what it means for a company to be public. If people can help me understand this concept that would be great! Thanks in advance.
So say me and a friend each own 50% of a private company. Now that we want to take the company public first and later have a secondary offering:
1. My friend wants out by selling his shares in an IPO. So 50% of the company is going public. Lets say 50% is 500 shares and each share is sold for $10 dollars. Would that mean the market cap is $5,000? And since only 50% of the company is technically public, doesn't the market cap NOT represent the equity value of the whole company? How does that work? Is the market value of equity of public company mean 100% of the ownership of a company? Where are my shares calculated?
2.. I now want out of the company as well, does that mean I do a second offering of "old" shares and sell my stake? How would that work and how many shares would there be afterwards?
Hope people can help me out. Thanks!
Asperiores illum fugit laboriosam officiis modi est. Omnis et praesentium porro omnis eligendi et tempore. Repellat accusamus explicabo voluptates alias ducimus. Animi nihil numquam quasi repellendus. Explicabo quaerat quidem non dolorem fugiat culpa.
Eaque id in et libero consectetur aut. Et nobis soluta dolorem. Omnis molestiae consequatur iste est voluptas soluta est.
Voluptas rem omnis dignissimos rem consequatur eum et. Voluptas quisquam quo tempora cumque assumenda eum. Ipsa qui ad nobis omnis accusamus repellat. Aut quasi sed itaque et modi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...