Introduction

Welcome to Equity Public Offering, the unit that covers how companies bring their shares to public markets and the different structures used to do it.

Exam Weight: Part of 17 questions

What You'll Learn

In this unit, you'll cover:

• Initial Public Offerings (IPOs): How a private company goes public, the underwriting process, types of underwriting commitments, and lock-up periods
• Secondary Offerings: What happens when existing shareholders sell their shares to the public, and the distinction between primary and secondary proceeds
• Special Purpose Acquisition Companies (SPACs) and Blank Check Companies: How shell companies raise capital through IPOs to acquire private targets, the de-SPAC process, and SEC Rule 419

Why This Matters

Public offerings are the gateway between private and public capital markets. As an investment adviser representative, you need to understand how new securities reach the market, who receives the proceeds, and the risks investors face with different offering types. The exam frequently tests the distinction between primary offerings (issuer gets the money) and secondary offerings (selling shareholders get the money), as well as the mechanics of SPACs.

Let's start with how companies first bring their shares to the public through an IPO.