Is a key holder better than a sales associate?

When a company goes public who profits from the sales of shares the corporation or the stock holder?

• When a company wants to go public don't the shareholders have to sell off some of their shares in order for there to be stocks to buy? So in this case when someone buys the shares the money should go to the stockholder but I thought the point of going public was to raise money for the CORPORATION to be able to grow! Hope you get what I'm saying! Also when a company goes public do the shares increase in value? For example before the initial I.P.O of Facebook people were saying Mark Zuckerburg would become even more wealthy than he was making him worth billions more than he was worth before but if he's selling shares how can he and the corporation itself make money??? Any help is appreciated!

• Answer:

  When a corporation goes from private to public, new shares are created to sell to the public. The private shareholders' stock is normally just converted to the new shares. For example, I just read an article where Bono (the lead singer of U2) is now worth over one billion dollars because of a 90 million dollar investment he made sometime in the past. So when a corporation has its ititial public offering (IPO), all of the funds generated (minus any expenses) do go directly to the company. After the IPO investors are just trading shares of the stock amongst themselves, making a profit or loss depending on what price the shares were bought and sold at. IPOs do not always increase in value. In fact the share price of Facebook has gone down since its IPO. In your example of Mark Zuckerburg, all of his privately owned shares were converted to the new public shares. The shares themselves are worth billions of dollars. But you really can't say that he's worth that much. If he decided to sell all of his shares, the price would drop drastically and he wouldn't get near the same market price for all the shares.