But the company does not own their shares which are sold - the owners do, right? So the owners get the price paid for the shares - not the company. Then how does the company profit from this? Am I missing something?
you are missing a few things, hopefully this will make sense what i say
when a company decides to float, they decide how many shares they will make available to the public. lets say 1000,000 shares
when it goes public the company sets a "notional" valuation of the new public price for each share..so now lets say I'm going to float my company for £2 per share, and lets say I manage to sell all my shares
what has happened? The money in the company bank account has increased by £2m, and the amount the company must pay to the shareholders also now increases by £2m. the "owners" are now not the owners of the company anymore, the shareholders are.
now, the company has just got £2m to spend, the "owners" have not necessarily received anything. I say necessarily because the company would already have had an allotted share capital, and these too become worth £2 per share, but not £2m worth
now as has been said earlier, there is a cost to floating 1m shares, and that cost is dividend payments. the floating of shares is nothing more than a very large loan to the company, and like any loan comes at a price. the company is not making any profit from this IPO. it is simply raising cash in the form of a "loan" from shareholders. each and every shareholder is a creditor of the company
does that make sense? the owners are now not the owners (all depends on majority shareholding) and they are simply directors, or CEO, CIO, CFO etc they have not received £2m. the company has. as soon as a company becomes a public company, there is a very clear distinction between the directors and the company itself