Page 4: Floating Freeserve
The London Stock Exchange is a market for securities, the collective name for stocks and shares. The main function of the stock market is to enable firms to raise capital and to provide a market for trading in second hand shares and government stocks.
NASDAQ is part of the American Stock exchange and is the world’s first electronic trading environment. It allows multiple market participants to trade a company’s stock through a sophisticated computer and telecommunications network making it a truly global market. The public shares offering of Freeserve raised net proceeds of over £122.9 million.
The Dixons Group retained 80% of Freeserve’s shares. The flotation of Freeserve has provided it with the capital to develop its range of content and services, while maintaining its relationship with the Dixons Group. This has placed Freeserve in a strong position to be able to respond to changes and maintain its competitive edge.
Flotation is the name given to the launch of a company onto the stock market by the offer of its shares to the public. Plcs that obtain a listing on the stock exchange gain a number of advantages:
- access to a large potential source of capital
- enhanced reputation for the company
- increased employee satisfaction via share option schemes
- easier buying and selling of shares, which increases their value.