The Company

What is an Initial Public Offering (IPO)?

An Initial public offering or IPO is the open offer to general public institutions of shares at fixed price proactive them to being quoted. For example, a few years ago the government share holding in BTV was sold to the general public at a fixed price and lot of shares were taken up by the public and subsequently served in the market.

Why do companies list on the stock exchange?

Companies normally list on the stock exchange to enable them to raise money and to offer a free market within their shares.

How many shares does a company have?

The number of shares a company has varies from company to company, but is based upon the issued share capital authorized by that company. So for instance, BP would have a far larger share capital than a smaller company such as Debenhams.

What is market capitalisation?

Market capitalisation is the value of the company. The way to calculate it is to take the number of shares in issue multiplied by the share price ruling at that date.

Why is market capitalisation important?

Market capitalisation is important because it gives the investor an indicator and an indication of the size of that company in a particular sector. For example, if you looked at Barclays Bank compared to your local High Street bank with a name of say, the co-op, Barclays would be far greater in size to the co-op. It allows the investor to see which company is larger in a particular sector, which can influence whether you're going to invest in a company or not.

What is a stock symbol?

A stock symbol is a code, a short code, used in the stock exchange to tell you the share price of a particular company. For instance, Imperial Chemical Industries is known as ICI.

What is a blue chip company?

A blue chip company is normally one of the largest companies trading on a listed stock market. It would be in UK, a constituent of the one hundred share index. The company would have a very good profit record, and probably a good, sound dividend record. For example, BP and Shell Oil would both be members of the one hundred share index and regarded as blue chip companies.