Equity issuance

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An equity issuance is the sale of new equity or capital stock by a firm to investors. Equity issuance can involve a private sale, in which the transaction between investors and the firm takes place directly, or publicly, in which case the firm has to register the securities with the authorities and the sale takes place in an organized market, open to any registered investor, a process more akin to an auction. Two common types of public equity issuance are initial public offerings (IPOs) and secondary equity offerings (SEOs or FO). This is one of the ways firms finance themselves, that is, they obtain funds from investors in order to engage in business.^[1]