Understand what follow-on is
Posted: Thu Jan 23, 2025 4:17 am
See how the process works in which a publicly traded company puts more shares into circulation
Follow-on or subsequent offering is the name given to the process in which a company that is already publicly traded and has already issued shares returns to the market to offer more shares.
From January to July this year, six offerings of this type were carried out on the Brazilian stock exchange. Together, these operations moved almost 12 billion reais.
Just like in an IPO, the distribution of shares can be primary or secondary. In the primary, the philippines phone number list issues new shares to sell to the public, thus increasing its shareholder base. At the end of the transaction, the money goes to the company itself and can be used, for example, to finance projects or reduce debts.
In the secondary phase, the company puts existing shares up for sale — generally, shares of partners who have decided to reduce their stake in the business. In this case, the proceeds go into the pockets of the shareholders who sold the shares and not into the company's cash flow.
The offering may be intended for the general public or exclusively for professional investors. In the first case, the company must comply with rules regarding disclosure and submit the process for registration with the Brazilian Securities and Exchange Commission (CVM) and the Brazilian stock exchange.
In the case of professional investors, registration is waived. In this case, according to CVM rules, shares must be offered to a maximum of 75 professional investors and purchased by a maximum of 50 of them.
Follow-on or subsequent offering is the name given to the process in which a company that is already publicly traded and has already issued shares returns to the market to offer more shares.
From January to July this year, six offerings of this type were carried out on the Brazilian stock exchange. Together, these operations moved almost 12 billion reais.
Just like in an IPO, the distribution of shares can be primary or secondary. In the primary, the philippines phone number list issues new shares to sell to the public, thus increasing its shareholder base. At the end of the transaction, the money goes to the company itself and can be used, for example, to finance projects or reduce debts.
In the secondary phase, the company puts existing shares up for sale — generally, shares of partners who have decided to reduce their stake in the business. In this case, the proceeds go into the pockets of the shareholders who sold the shares and not into the company's cash flow.
The offering may be intended for the general public or exclusively for professional investors. In the first case, the company must comply with rules regarding disclosure and submit the process for registration with the Brazilian Securities and Exchange Commission (CVM) and the Brazilian stock exchange.
In the case of professional investors, registration is waived. In this case, according to CVM rules, shares must be offered to a maximum of 75 professional investors and purchased by a maximum of 50 of them.