An IPO, or Initial Public Offering, is a public offering of shares in a private company, allowing the company’s stock to be bought and sold on the market by individual investors.
Allocation occurs once all bids are final and submitted to the lead manager. It represents the amount of shares that the company has allocated to investors that have bid into the offer.
The effect of capital raises on dilution is a common concern of existing shareholders as it affects their ownership percentage. Each type of capital raise is affected by dilution differently and there are advantages and disadvantages to each depending on the situation.
A lot of terms used in Equity Capital Markets can be new and confusing. Here are some explanations of the key terms and links to further information on the topics.