Quote:
Originally Posted by olusolakemmy
PO is public offer, means the company is selling new issue, i.e adding or increasing the share volume but offer for sale is like the company is selling some of their holding, in this case, it is not new issue, but an existing issue but just change of ownership, e.g dokpesi as a person decide to sell 10% of his personal holding.
offer for sale doesnt increase the share volume of a company but public offer does.
i really dont know the advantage of one to another as it concerned an average investor like you and me, but i think i will prefer offer for sale because it doesnt increase the volume of shares available.
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The central advantage of Offer for Sale is that, since no new funds would be coming to the company, the investors or subcribers for the shares would not have to wait for new funding to be invested and contribute to profit. In short, it does not lead to dilution of shares without an immediate corresponding contribution to profit. Except for the delay in issuing share certificate, it is like buying shares from the secondary market. However, the issuers might have priced this advantage into the offer price, making it more richly priced (i.e., higher P/E ratio that is almost as high as what prevails in the secondary market for shares of comparable quoted companies). In addition, the scope for absorption of excess subscription is constarined or even absent as the proprietor divesting his shareholding may not be willing to divest more than the initially intended percentage - as in the case of Dangote's POs.