Going Public Doesn't Mean Selling the Whole Company
Summit Mobility has 40 million shares: founders own 30 million (75 percent) and early investors own 10 million (25 percent).
Why this matters for beginners
An IPO usually sells only part of a company. This is general education, not personal advice.
Main explanation
Summit issues 10 million new shares in its IPO at €20 each. Total shares become 50 million.
Founders now own 30 of 50 million = 60 percent. Early investors own 10 of 50 = 20 percent. New public shareholders own 10 of 50 = 20 percent.
The company raises 10 million × €20 = €200 million gross, before fees.
Ownership moves from 75/25/0 to 60/20/20. The founders still control most of the company.
Example using a real company
Summit Mobility: 40 million shares become 50 million after a 10 million share IPO at €20.
- →Before: 75 / 25 / 0.
- →After: 60 / 20 / 20.
Common beginner mistakes
- ✕Thinking an IPO sells the entire company.
- ✕Forgetting new shares change everyone's percentage.
Key terms
- IPO
- Initial public offering: the first sale of shares on a stock exchange.
- Gross proceeds
- Money raised before fees.
Key takeaways
- 01An IPO usually sells only part of a company.
- 02New shares reduce existing owners' percentages.
- 03Gross proceeds = new shares × price.
Check yourself
- 01Founders own 30 million of 50 million shares. Percentage?
- 0210 million new shares at €20 raises how much gross?
- 03What share do new public shareholders own?
- 04Does an IPO usually sell the whole company?
Try the concept on a real company
Open a company in the Analyzer and ask which of these mechanics could explain its recent price moves.
Educational examples only. Not buy or sell recommendations.