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How Does a company make money through its IPO?
10-15-2012, 09:02 PM
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Yi Offline
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How Does a company make money through its IPO?
I understand the basics of Finance but I always wondered how does a company make money during its IPO. I am curious particularly about Facebook. It is filling for an estimated 5 billion IPO and probably a 75-100b Market valuation. I know that the company sells the shares to make the money but where exactly does that 5 billion come from? And why does it go to them and not the underwriters? I know for example Morgan Stanley is selling the stock but where is the $5 billion coming from? If Facebook sells the shares, should they not get $100 billion dollars and not 5?
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How Does a company make money through its IPO? - Yi - 10-15-2012 09:02 PM
[] - John B - 10-15-2012, 09:10 PM

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