Direct public offering
What is a direct public offering?
This is when a company raises money by offering potential investors the chance to buy its securities directly, without using 'middlemen' - such as brokers or investment banks - that are commonly involved in initial public offerings (IPOs).
Where have you heard about a direct public offering?
Also known as DPOs, you may have been given the chance to buy shares in the company that you work for. This allows the firm to raise capital without paying for the services of a broker.
What you need to know about a direct public offering.
The idea of a DPO is that a company self-underwrites the securities. This can help to reduce costs and raise extra finance. It also means that the instruments are available to anyone, including employees, customers and suppliers. The company can decide on the terms of the sale, and the number of instruments one single person can buy. As a potential investor, an DPO can offer a fast and flexible route into share ownership, although losses are of course possible.