Types Of FPO English

Types of FPO

The types of FPOs are follow-on Public Offerings (FPOs): dilutive and non-dilutive. A dilutive FPO involves issuing new shares and increasing the total number available, which can dilute existing shareholders’ equity. Non-dilutive FPOs occur when existing shareholders sell their shares without creating new ones.

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What Is FPO In The Stock Market?

In the stock market, an FPO (Follow-on Public Offering) is when a publicly traded company issues additional shares to investors after its Initial Public Offering (IPO). It’s a way for companies to raise extra capital, either by offering new shares or selling existing ones.

An FPO, or Follow-on Public Offering, is a process where a listed company offers additional shares to the public. This can be done after the company has already completed its Initial Public Offering (IPO).

There are two types: dilutive and non-dilutive. A dilutive FPO introduces new shares, potentially reducing the value of existing shares. Non-dilutive FPOs involve selling shares held by existing shareholders, without increasing the total number of shares in the market.

For example, a company that initially issued 1 million shares in its IPO might issue 500,000 additional shares in a dilutive FPO. This increases total shares to 1.5 million, potentially diluting existing shareholders’ equity.

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