An issuer is an organisation that registers, distributes, and sells a security on a Primary Market. An issuer can be a private company or a government or even an Exchange for derivatives such as equity and index futures and/or options. There are different kinds of financial instruments which can be issued: shares, bonds and derivatives, GDRs (global depository receipts).
For shares, the primary market refers to the initial issuance and, therefore, to a company’s IPO price. The products traded – securities – are "delivered" by issuers, that is to say, listed companies, who are obtaining equity financing through a new share issuance.
Exchanges may themselves be listed companies, as for example the London Stock Exchange Group, NYSE Euronext, Deutsche Boerse, Nasdaq OMX …
By listing on an exchange through an Initial Public Offering (IPO), a company that has previously been in private hands goes public.
The issuing price is an indication of the initial price determined at the Exchange following a specific process.
The evaluation of a company is made by the wider market. Advisers who follow the company and take it to the market act as intermediaries between entrepreneurs’ or CEOs’ pricing expectations and an investors’spending capacity.
In order to do this, advisers use evaluation methods which compare the listing company to all its listed competitors and ask all potential investors to provide their pricing estimate when they express their demand (bookbuilding phase). The final pricing confirmation however, occurs on the first trading day, when the market opens and orders effectively are input into the trading system.
(*) Bookbuilding = The process by which an underwriter attempts to determine at what price to offer an IPO based on demand from institutional investors.
However, once the company is listed, the price set by trading after an IPO can sometimes differ from the IPO price depending on:
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