Suppose there is a market price of shares, say $1 per share. The company decides to issue more shares. At what price should they be sold? And who determines the price? The company itself or the market?

I am not asking about IPO. Rather, imagine the company has already been public for a year, and then it issues more shares.

1 Answer 1


At what price should they be sold? And who determines the price?

It's very similar to an IPO. The market (meaning the people that buy the shares) determines the price. There will typically be an underwriter in the middle that will agree to buy the shares for a specific price (based on what they think the market will pay for them), then facilitate the sale of those shares on the open market, hoping to make a profit overall. The market may be willing to pay more or less than the existing shares, depending on what the company plans to do with the proceeds.

  • A typical dilutive secondary offering can resemble an IPO. The issue is priced by the underwriter(s) and shares are offered at that price to the account holders at syndicate firms. Jan 28, 2021 at 20:39
  • Can the company sell these stocks partly, say, 10% per day in order to see market sentiment and based on this correct the price? Jan 28, 2021 at 20:53

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