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Chapter 1: Question 3-IB (page 79)

What is the difference between an IPO (initial public offering) and an SEO (seasoned equity offering)?

Short Answer

Expert verified

Initial Public Offering (IPO) is the first issue of stocks for sale by a private company.

Seasoned Equity Offering (SEO)- The follow on offering of stocks for sale.

Step by step solution

01

Definition

The first issue of stocks for sale by a private company is known as its IPO i.e. Initial Public Offering.

In contrast, the Seasoned Equity Offering or SEO are the follow on offering issue of stocks for sale by a company.

02

Differences

Difference between IPO and SEO:

IPO

SEO

1. It represents the first issue/sale of stock to public by a private company.

1. It represents the follow on offer of issue of stock to public.

2. It represents the first sale of .securities to general public.

2. It represents the additional sale of securities to public.

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