3.10.12 What is FOO and its difference to SRO & 2PO

Firstmetro’s charting software is down again. For the mean time, let’s just understand the difference of FOO, SRO & 2PO.

 

Phoenix Petroleum Mulls Follow-On ListingManila bulletin

The board of directors of publicly-listed Phoenix Petroleum Philippines Inc. has given its management the go signal to carry out cash-raising options, which may include a follow-on offering of its shares. Read more

 

Since I claim that I don’t know everything, I asked one of the respected masters in trading in PSE, although he doesn’t want to admit that. I know SRO & 2PO, but I’m also quite confused on what is a FOO?

This was my question:

“need your expertise
nalilito pa po ako sa FOO. ano difference nya sa 2PO at SRO?
This is dilutive di ba, so negative impact sa market price?”

 

Please click the link below to see his very informative answer

A must-read: Shingen Takada’s Blog post on PNX

 

 

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Investopedia’s Definition on the following.

FOO or Follow-on offering

An issue of shares of stock that comes after a company has already issued an initial public offering (IPO). A follow-on offering can be diluted, meaning that the new shares will lower a company’s earnings per share (EPS), or undiluted, if the additional shares are preferred. A company looking to offer additional shares, registers the offering with regulators which includes a prospectus of the investment. – investopedia

 

SRO or Stock Rights Offering

Issuing rights to a company’s existing shareholders to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period. – investopedia

 

2PO  – Secondary Public Offering

1. The issuance of new stock for public sale from a company that has already made its initial public offering (IPO). Usually, these kinds of public offerings are made by companies wishing to refinance, or raise capital for growth. Money raised from these kinds of secondary offerings goes to the company, through the investment bank that underwrites the offering. Investment banks are issued an allotment, and possibly an overallotment which they may choose to exercise if there is a strong possibility of making money on the spread between the allotment price and the selling price of the securities.

2. A sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings. The proceeds of this sale are paid to the stockholders that sell their shares. Often, the company that issued the shares holds a large percentage of the stocks it issues – investopedia

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