Can a privately held company issue more (new) shares to IPO?
Sam, A privately owned company is private. It has no shares available to the public. If is desires to publicly sell shares it need first undergo an expensive and time consuming process for consent by the U.S. Securities Commission. A number of states have their own securities laws and the privately owned company will likely have to qualify with state laws before it could legally sell shares to the public. Penalties for failure to follow the technical procedures are harsh and unforgiving. Typically private companies engage in a reverse stock split to rid itself of unwanted shareholders. The company then qualifies to trade publicly and provide the desired proportion of stock for sale to a “market-maker” to regulate the flow of the stock into the public market. If this were already a public company, the company could sell shares into the public market market from previously authorized but unissued “treasury stock”. Rarely are private or publicly traded companies sold out of authorized sto
