Follow-on public offer

A sale of shares to the public by a company that is already listed. It can raise fresh capital for the company, sell existing shares held by promoters or early investors, or both.

The distinction between the two is the one that matters. A fresh issue puts money into the business; an offer for sale moves shares from one owner to another and puts nothing into the company at all, while still diluting nobody.

The offer document sets out the split and the intended use of proceeds.

Where an offer is entirely a sale by insiders, ask why they are selling.