Stock Trading and Other Things

What and who determines the initial value of your shares when you float business onto the stock exchange?

For example, a business decides to float their company, its first day on the London Stock Exchange, it opens at £3.33. What would determine that price?

Public Comments

1. It is an arbitrary value chosen by the company issuing stock.

2. The market. Whatever price people are willing to buy it at.

But the broker dealers who manage the deal (market makers) also play a role.