IPO Pricing Methods

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IPO Process Library · 05 Valuation & Pricing

Last Updated | November 11, 2026

At-the-Market vs IPO

An IPO sets the first public price through a managed book-building process. At-the-market offerings sell shares of already-public companies at prevailing prices. IPOs are priced once, based on investor demand and valuation. At-the-market programs let public companies sell shares gradually into the market through an agent under a shelf registration.

Key Takeaways

• IPOs set a single negotiated price.
• At-the-market sales use prevailing prices.
• ATMs require an already-public company and shelf registration.
• Each method has different dilution and cost profiles.

Book-Built IPOAt-the-Market OfferingsWhich Is Used WhenIPO vs At-the-MarketFAQRelated

01

Book-Built IPO

Underwriters collect indications of interest, then set one price for all allocated shares. There is no existing market price to reference.

02

At-the-Market Offerings

A public company with an effective shelf registration can sell shares through a broker at market prices over time. The company controls timing and amount, and sales are small relative to daily volume.

03

Which Is Used When

IPOs are used to go public. At-the-market and follow-on offerings are tools for companies that are already public and need more capital.

04

IPO vs At-the-Market

Item	Book-built IPO	At-the-market
Price	Set once through book-building	Prevailing market price
Timing	Single event	Gradual over time
Requirement	First public sale	Already public with an effective shelf
Marketing	Roadshow	Usually none

05

Common Questions

Can a private company use an ATM?

No. It requires an already public company.

Does an ATM dilute shareholders?

Yes, any new share issuance dilutes existing holders.

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Keep Reading

How IPO Pricing WorksArt and math of setting the range./p/ipo-pricing.htmlBook-Building ExplainedHow orders create demand curve./p/book-building.htmlFollow-On OfferingsRaising more after IPO./p/follow-on-offering.htmlIPO Price RangeWhy $15-$25 and how range is set./p/ipo-price-range.htmlIPO Pricing NightFinal pricing after roadshow./p/ipo-pricing-night.htmlWhat Happens on IPO Day?Opening auction and first trade./p/ipo-day-explained.html

Methodology & Sources
Synthesizes SEC rules and guidance (Securities Act of 1933, Exchange Act of 1934, Regulation S-K), NYSE/Nasdaq listing standards, FINRA rules, and public S-1 filings. Cross-checked against primary documents. Rules, thresholds, and timelines change; confirm current requirements with counsel before acting. General education, not legal or investment advice.

Author: Erwin Castro