Hi I have question about the ipo. I have read the wiki: http://en.airlinesim.aero/wiki/index.php/IPOand still not understand something.
I started ipo for my airline and I know I’m selling 25% of my shares. How can the subscribed so far be higher than volume, e.g.:
Volume = 23,965
Subscribed so far: 31,732 (132.4%)
I thought I’m selling 23,965 (which is 25% of my airline)? Am I selling more than 25%?
I noticed that the expected price increased, does that mean something?
No you will only give away 20% but the more people that subscribe the more money you will get from the IPO to a certain max point. The people who bought shares will just end up with a smaller number than they signed for.
Hi sir, thank you for replying. Definitely cleared most of my concerns. Thank you very much.
When will the ipo end and be listed on stock exchange? The subscription period deadline has passed but the ipo apparently is still running?
Within an hour of the subscription deadline, when the IPO server process runs.
Ah got it. I can see my ipo now ended and trading already. However I thought my holding was going to be receiving the ipo sale money, but how come it was my subsidiary that was credited with the sale money?
Because your holding did not sell any shares it held, new shares were issues. When new shares are issued and sold, they increase equity of the issuing entity not directly of its owner. Same as in real life. If you want, your holding can sell some shares on the open market.
Understood. Thank you very much for explaining this. I had no idea it was issuing new shares, I always thought I was selling. Silly me
How do I increase my equity? Somehow my equity is negative? How is this possible since I’m in profit?
You have less equity than what you have started with. If you are profitable you should be able to build back that amount. Though it means that you have been loosing some money somewhere that aren't investments (seats, leasing deposits, etc) as they are still calculated as equity. As you are profitable I wouldn't worry.