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New Issue

  

Categories: IPO

See: IPO. See: Primary Market.

It's like the financial market equivalent of a new kid in school...or that up-and-coming singer who just released her first single. A new issue is just what it sounds like: a stock (or other security) getting sold to the public for the first time. Or, you could say: newly issued.

Companies raise money in various ways. They can borrow from a bank or other source (which doesn't really play a role here). Or they can bring in cash by selling bonds or stock. Bonds represent debt; the company selling them is borrowing money that they will pay back at interest. Meanwhile, shares of stock equate to tiny ownership stakes in the company. Either of these can become new issues when they're made public for the first time.

Related or Semi-related Video

Finance: What is an Interstate Offering?0 Views

00:00

Finance allah shmoop what is an interstate offering When companies

00:07

issue an offering of stocks or bonds or other securities

00:11

Well they can sell shares in their state or in

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more than one state interstate So why is this even

00:19

a thing Well it wasn't before nineteen thirty three but

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then there was the advent of this little act cleverly

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titled the securities act of nineteen thirty three and it

00:30

regulated the offering of securities to the public and that's

00:33

a thing because state laws often differ among states and

00:37

sometimes from federal laws like think about how marijuana works

00:41

these days It's legal ish in a number of blue

00:44

states at least as of two thousand nineteen But it's

00:47

not federally legal like it's not legal in the entire

00:51

country So if you're a poor nfl player wanting to

00:54

get stoned and you're in this state or that seo

00:56

what do you do What do you do All right

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well securities have the same issues Lots of small technical

01:02

lawyerly things But they matter in a court of law

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when problems arise and in the investing landscape well they

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invariably do You have problems arise all the time so

01:12

say a volume real estate developer wants to build a

01:14

chain of robotically managed old age homes If she's raising

01:18

money on lee from her home state then she doesn't

01:22

need to deal with all kinds of federal filings Well

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she just follows whatever rules her state tells her to

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follow and she can go bang a tangerine and hope

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to raise dough from mon paw investor bumpkin But if

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she wants to expand her fundraising efforts across state borders

01:39

even doing just one more state well then she has

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to file all the paperwork for an inter state offering

01:46

which is almost always meaningful eam or complex Because you're

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now interstates you've got at least two states rules you

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have to comply with Why would she even care Like

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why not just file in the state in which your

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based and raise all your money there in that state

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Well legally if you do business outside of your state

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you have what's called sufficient ties to basically let the

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law view you as being fully ensconced in all the

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states in which you're doing business you legally can from

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a corporate perspective live or do business in north dakota

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Minnesota michigan and wisconsin hope you like not being able

02:20

to feel your fingers up there if they choose door

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number two meaning the cross state means of raising money

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for the old age home Well then that's an interstate

02:30

offering and it'll mean a whole lot more paperwork The

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company will need to register with every state that they're

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raising money in And with the sec the benefit of

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registering federally for an offering dough federally meaning registering to

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do business in all states So you comply with federal

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law which is usually stricter and more dicey than state

02:51

law And simply put there's mohr investor dough available nationally

02:56

than there is in any given individual state So your

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odds of catching a fish get way better if you're

03:03

fishing in the ocean then if you're just fishing in

03:06

one of fifty ponds and if you're ice fishing while 00:03:09.193 --> [endTime] good luck avoiding hypothermia we're looking atyou North dakota

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A primary offering is just an IPO - the initial public offering of a given stock. Primary shares are the shares of that stock that are sold... publ...

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