When a company decides to go public, its shares are not directly listed on the stock exchange. First, the company must sell those shares to investors. This previous step is called Initial Public Offering (IPO).
This is where the terms primary market and secondary market come into play. IPOs are considered to take place in the primary market, although the shares that are purchased can then be sold on the stock market, which is a secondary market.
After the IPO, the ownership structure of the company changes enormously. In addition, a part of its shares are available in the stock market to be freely bought and sold.
As discussed in previous posts, listed companies must meet a series of requirements and conform to a very strict regulation. Therefore, before being listed, not only must they request an authorization from the Spanish National Securities Market Commission (CNMV), they also must follow a structured process, which includes audits and the participation of a registered financial advisor and an underwriter, among other steps.
Although all types of companies can resort to the IPO, regardless of their sector, size or seniority, the truth is that an IPO is a milestone in their history. In many cases, these are young companies or with solid plans to grow and expand, which is why they are usually attractive to all types of investors.
In any case, investors who decide to buy shares of a company in an IPO automatically become co-owners, even in a very small proportion.