| When a company decides to list its shares on a stock market it is said to embark on a flotation, also known as an initial public offering (IPO). As part of this process, the company publishes a prospectus describing its business, its directors, its financial position, and what profits it expects to make. The information it includes has to conform to strict guidelines so that potential investors are not misled. The prospectus announces the issue of new shares, sets an offer price for the shares, and invites subscriptions. In a flotation a company raises money by issuing new shares in what is known as the 'primary market'. Once the shares are listed, further trading in them occurs in the 'secondary market' - secondary in the sense that it is a second stage market between investors that does not involve the company itself.
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