What Are DPOs and What Makes Them Attractive?
The Direct Public Offering (DPO) is a method for a company to raise capital. As in the more common Initial Public Offering (IPO), the company can advertise and issue stock for sale to the public. An IPO is handled by an underwriter or investment banker who buys all the stock and resells it on the open market through a stock exchange listing, usually at considerable expense. With a DPO a small company can sell stock to the public without having to go through such a process. DPO’s are a stock offering method approved by the SEC to (1) make it easier for small businesses to obtain financing and (2) to make it possible for investors to participate in the growth of small companies which sell their stock directly to the public without intermediaries. This is a significant alternative because the savings involved can translate into increased profits for both issuers and investors. Because DPO’s have generally not been effectively executed, their potential has yet to be realized, but the rapid
