When a company goes public, how long does it take for the original owners to sell their stock?
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02-03-2013, 02:47 AM
Post: #1
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When a company goes public, how long does it take for the original owners to sell their stock?
Also, how is it decided who's stock sells first? I ask because after Facebook went public, news sites were saying that Zuckerberg's net worth was going up and down with the value of Facebook's stock.
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02-03-2013, 02:55 AM
Post: #2
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Ok, a private corporation may issue stock, so I assume this means the "original owners" in your context. When the corp. goes public, it prints more stock certificates, and sells them to the public. The original owners will likely have the opportunity to buy pre-IPO stock; but, to answer your question, their "old" stock will be changed into new stock of the public company. This is simplistic, but it's the general idea.
How long does it take to sell the original stock? Well, that depends on the whims of the original owner. When a corp. does an IPO, it doesn't take the original stock from when the company was private and sell that off to investors. It decides how much money it wants to raise... sets an initial price for each share of stock... trades the original owners X share(s) for each of their Y share(s).. and then sells blocks of stock on the open market. Of course, the corporation itself doesn't do the selling. Investment banking heavyweights do that. Ads |
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