Stock issue price
The stock issue price refers to the price that a joint stock limited company (a company to be listed) sells to investors when it publicly issues shares. There are generally two situations that will involve the issue price of stocks. The first one is new shares. Before a listed company goes public, the initial public offering price of shares is the issue price of shares. If you successfully apply for new shares, the price you buy is it.
Secondly, the re-issuance of shares by listed companies will also involve the issue price of shares, but the conditions for re-issuance of shares are more stringent, because the market stock funds are limited, which is equivalent to drawing blood from the stock market, and the CSRC will not easily pass.
How is the stock issue price determined?
The issue price of shares is determined by the issuer and the underwriting securities company (i.e. investment bank) through negotiation. The so-called issuer refers to a company that issues shares to raise funds. If a company wants to go public, it must rely on a well-connected securities company to help it sell shares. This way is underwriting.
There are generally three pricing methods of stock issue price, including price-earnings ratio pricing method, net asset ratio method and bidding method. What kind of issue price determination method will be adopted by specific listed companies will be disclosed in the issuance announcement. But no matter which method, there is basically a unified routine.
The first is to see how much the company is worth, and set a pricing range of the issue price according to the valuation. Then let the market match the price, that is, the issuer and the securities company go to the investors who buy the stock for inquiry at one time. After inquiry, securities companies and investors will compete to determine the issue price of shares through bidding.