What Happens After the Offering of Common Stock & Warrants?

by Dennis Hartman ; Updated April 19, 2017
A business that issues stock is ready for public trading.

Issuing stock through an initial public offering is one of the key steps in a company's growth, But while an IPO represents the end of a long, complex process, it is also the beginning of a new phase in the financial life of a business and its new investors. After offering shares of common stock and warrants, several things begin to happen simultaneously.

Quiet Period

The Securities and Exchange Commission oversees stock market regulation. Once a company issues an IPO, the SEC mandates a 25-day waiting period, or quiet period. During this time the company's leaders and the underwriters involved in the IPO can't issue formal statements or offer estimates of the company's value. Once the quiet period ends, this information quickly becomes available to investors who can then weigh the option of buying common stock against other investment opportunities.

Trading

Even before the quiet period ends, once common stock and warrants have been issues the stock becomes available for trading on an exchange. Anyone who holds a seat on an exchange can trade the stock, while brokers and their clients can place orders through them. Over time trading, along with the published reports, financial statements and analyst comments that impact it, will determine the share price of the common stock and cause it to rise or fall based on what investors as a whole feel the company is worth.

Dividends

As a business with outstanding shares of stock makes money, it can choose to retain some and distribute the rest to investors in the form of dividends. Owners of preferred stock receive dividends first, guaranteeing a return on their investments. Common stock holders receive dividends next, if there is sufficient cash available for the payment. If preferred stock owners also have warrants, which some companies include with shares of preferred stock during an IPO, they can exercise these special rights to buy shares of common stock at predetermined prices, giving them chances to earn additional dividends in the future.

Business Operations

Once a business has offered common stock and warrants through an IPO, it must begin pursuing an operational strategy. Regardless of the reasons for the IPO, offering stock means an injection of capital into the business. This is money that leaders can choose to spend on acquiring other businesses, marketing to increase its customer base, expanding into new markets or developing new products. Even after issuing common stock, a business can still sell bonds, which may come with warrants, to raise even more money.

References

Photo Credits

  • Photodisc/Photodisc/Getty Images

Related pages


dmv california release of liabilityira inheritance rulessavings bond serial numbergood stockswashington unemployment calculatortennessee child support enforcement servicessplitting 401k due to divorcesale price variancerevocable trust taxespv of bond calculatorcatholic charities sacramento caiban routingmedicare weight loss programstalecris plasma portlandload prepaid debit card with credit cardhow to calculate common stock dividendsca income tax refund statusfia bill payaverage price of eye exammargin account etradehow much taxes should i take out of my paycheckwhat is precertificationfinancial assistance denturesschedule 8863tricare insurance cardvisa gap credit cardhow much should i contribute to my 401kee patriot bonddonate blankets to charityhow much usd is in circulationtd bank credit card limitwalmart credit card approval ratehow much do you get paid to sell plasmavanilla visa gift card balance checkercredit card interest calculator compounded dailychevron gas card paymentalabama tax instructionshow to withdraw cash from debit carddonate contact lenses lions clubprorate definitionchild support office fort wayne indianaboa prepaid debit cardmultiple rfid cards in walletroth ira vs brokerage accountcvp cost accountinghow to check minutes on at&t phonewhat is considered a hardship for 401k withdrawaldeed restriction definitionirs 590 tablecan unemployment be garnishedsample promissory letter for paymentonline percentage difference calculator1099 for unemploymenth&r block emerald advance qualificationsau pair taxesirrevocable trust formnet asset value calculation formulabond expected rate of return calculatorelizabeth raynereverse mortgage maximum loan amountfidelity investments headquarters addresssure401ksouth dakota scratch ticketshow to freeze a debit cardbeneficiary tax ratehow much money per pound of aluminum cansharris county liensmomentum visa prepaid debit cardnypl book salewhat is the maximum income to qualify for fafsadifference between gross pay and taxable paymetabank prepaid cardswhat is unlevered cost of capitalcan someone else pay your traffic ticketlife insurance vs annuitycan i get my income tax refund earlythird party check cashingparents assets on fafsacondo fees tax deductible

Related pages


dmv california release of liabilityira inheritance rulessavings bond serial numbergood stockswashington unemployment calculatortennessee child support enforcement servicessplitting 401k due to divorcesale price variancerevocable trust taxespv of bond calculatorcatholic charities sacramento caiban routingmedicare weight loss programstalecris plasma portlandload prepaid debit card with credit cardhow to calculate common stock dividendsca income tax refund statusfia bill payaverage price of eye exammargin account etradehow much taxes should i take out of my paycheckwhat is precertificationfinancial assistance denturesschedule 8863tricare insurance cardvisa gap credit cardhow much should i contribute to my 401kee patriot bonddonate blankets to charityhow much usd is in circulationtd bank credit card limitwalmart credit card approval ratehow much do you get paid to sell plasmavanilla visa gift card balance checkercredit card interest calculator compounded dailychevron gas card paymentalabama tax instructionshow to withdraw cash from debit carddonate contact lenses lions clubprorate definitionchild support office fort wayne indianaboa prepaid debit cardmultiple rfid cards in walletroth ira vs brokerage accountcvp cost accountinghow to check minutes on at&t phonewhat is considered a hardship for 401k withdrawaldeed restriction definitionirs 590 tablecan unemployment be garnishedsample promissory letter for paymentonline percentage difference calculator1099 for unemploymenth&r block emerald advance qualificationsau pair taxesirrevocable trust formnet asset value calculation formulabond expected rate of return calculatorelizabeth raynereverse mortgage maximum loan amountfidelity investments headquarters addresssure401ksouth dakota scratch ticketshow to freeze a debit cardbeneficiary tax ratehow much money per pound of aluminum cansharris county liensmomentum visa prepaid debit cardnypl book salewhat is the maximum income to qualify for fafsadifference between gross pay and taxable paymetabank prepaid cardswhat is unlevered cost of capitalcan someone else pay your traffic ticketlife insurance vs annuitycan i get my income tax refund earlythird party check cashingparents assets on fafsacondo fees tax deductible
"].join(""));l.close()}catch(m){b.src=a+'d.write("'+loaderHtml().replace(/"/g,String.fromCharCode(92)+'"')+'");d.close();'}b.contentWindow.config=k;b.contentWindow.SCRIPT_ID=g},0)}}}(); window.usabilla.load("w.usabilla.com", "4a73c8c43a12"); /*]]>{/literal}*/