Direct Public Offerings

When securities are offered direct to the public, without any aid from an investment banking firm, the company is said to be doing a Direct Public Offering (DPO).

The companies must have a complete set of financial statements and a disclosure statement in order to complete DPO.

Points to remember:

• DPO offers the company a chance to build the capital money from its own community and not only the wealthy investors.
• As DPO have an exemption from the federal registration requirements, they are not required to be registered with Securities and Exchange Commission (SEC).

Example:

Spotify had opted for the DPO route in 2017, so public investors could have access to its shares.