Huy:

Selling stock to the public refers to the process of offering shares of a company to individual and
institutional investors through an Initial Public Offering (IPO) for the first time. This allows the
company to transition from being privately owned to becoming a publicly traded entity.

For example: Vinamilk (Vietnam Dairy Products JSC): Vinamilk, one of the largest dairy
companies in Vietnam, conducted its IPO in 2003. It became the first Vietnamese
company to list on the Ho Chi Minh Stock Exchange (HOSE) and attracted substantial
interest from investors.
Here’s a simplified explanation of how selling stock to the public works:

1. Company Evaluation: The company, with the help of investment bankers and underwriters,
assesses its financial standing, growth prospects, and market position to determine if it’s
ready for an IPO.

2. Valuation: The company, often with the assistance of investment bankers, determines the
value of its shares by evaluating various factors, including financial performance, industry
comparables, growth potential, and market conditions.

3. Pricing: Based on investor demand and feedback, the company, in consultation with its
underwriters, determines the offering price per share. This is a crucial step as it determines
the initial valuation of the company.

4. Stock Exchange Listing: Upon completion of the IPO, the company’s shares are listed on a
stock exchange, allowing shareholders to trade their shares freely on the open market. The
company is required to meet ongoing reporting and compliance obligations set by the stock
exchange and regulatory bodies.

Quang:

Primary Market

The primary market is where companies issue new securities, such as stocks or bonds, to raise capital
from the public. This process is often referred to as an initial public offering (IPO). In the primary
market, investors purchase securities directly from the issuing company.

For example, company VINFAST hires underwriting firm to consider the financial details of its IPO.
The underwriters detail that the issue price of the stock will be $22. Investors can then buy the IPO
at this price directly from the issuing company.

Secondary Market
Once securities have been issued in the primary market, they can be traded among investors in the
secondary market. This is where the vast majority of securities trading takes place. In the secondary
market, investors buy and sell securities from each other, and the prices are determined by supply
and demand.

For example, if you go to buy VINFAST (VFS) stock, you are dealing only with another investor who
owns shares in VINFAST. VINFAST is not directly involved with the transaction.