Listings and IPOs: new shares, existing shares and who receives the money

Read which shares are actually offered

Before the offering, the fictional company has 1,000 identical shares. It issues 200 new shares, and an existing owner sells 300 existing shares. All 500 are offered at SEK 40 each. Assume every share sells, no other shares are issued, and the calculation includes no offering costs. These assumptions determine the example’s amounts.

The 200 new shares bring the company SEK 8,000 before any costs. The 300 existing shares bring the selling owner SEK 12,000. The company does not automatically receive that SEK 12,000 as well. Check the offering’s split and who is selling: a large total sale amount is not always the same as new capital for the business.

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Count only genuinely new shares as additions

After the offer, 1,200 shares exist: the previous 1,000 plus the 200 newly issued. Selling 300 existing shares changes ownership without creating extra shares. If the previous owner initially held all 1,000 and sold 300, they retain 700: approximately 58.33 percent of the 1,200. Keep this quantity separate from the shares offered to buyers.

At the SEK 40 offer price, the model’s total share value is 1,200 × 40 = SEK 48,000. That differs from the company’s SEK 8,000 of new cash. Other company assets, liabilities and expenses are not supplied. This is share value at an assumed price, rather than a complete business valuation or a description of its cash balance.

A later market price does not change who received offer proceeds

At the next separate observation, market price is SEK 32. A participant following ten shares bought at SEK 40 sees value fall from SEK 400 to SEK 320: −20 percent before costs. Total share value at SEK 32 is SEK 38,400 if quantity remains 1,200. The offer price therefore did not guarantee the later price.

An ordinary later trade between two owners does not raise new capital for the company merely because its share is listed. Payment goes to the seller in that trade. A separate new issue is needed for our previous new-capital example. Do not mix a later valuation of all shares with money the company already received in the offering.

Questions to take to an offering document

Record the share classes and rights offered, the number of new shares, selling owners, pricing terms and how allocation is described. Also read business information, financial figures and risks. Our assumption that everything sells is only a model rule; an application in a real offering need not deliver the requested share quantity.

Investiq’s company-search guide helps start with identity, share information and observation time. This page describes no IPO subscription, allocation or automatic monitoring in the app. Use the new-share-issue lesson for quantities and ownership, and read an actual offering document separately to understand its specific terms.