Methods of flotation
The sponsor will look at the motives for wanting a quotation, at the amount of money that is to be raised, at the history and reputation of the firm, and will then advise on the best method of issuing the shares. The final choice often rests on the costs of the method of issue, which can vary considerably. Here are the main options:
- Offer for sale. The company sponsor offers shares to the public by inviting subscriptions from institutional and individual investors. Investors will need to contact the sponsor or the broker to obtain an application form and read the propectus. Normally the shares are offered at a fixed price determined by the company’s directors and their financial advisers.
- Introduction. Introductions do not ...