A confidentially marketed public offering, or CMPO, is a fundraising method where an underwriter privately markets a public company's shares to a select group of institutional investors before making a public offering. This approach allows the company to test the market and gauge investor interest before pricing the offering. CMPOs are typically conducted under an effective Form S-3 registration statement and involve registered shares that can freely trade. They offer a shorter timeframe, confidential marketing, potentially more attractive pricing, broader distribution, and exemption from certain stockholder approval requirements.
Steps:
Public announcement in a press release by the company after hours such as "XYZ company announces proposed underwritten public offering"
Bankers contact institutions to gauge demand for the issue
Bankers determine price based on indications of interest
Final pricing usually announced within 2 business days