How does company issue more shares after IPO? Does it issue new shares at the market value or book value per share?

The float is the number of shares sold to the public. For Facebook, it was 421 million shares. The rest of the shares are owned by venture capitalists with the vast majority owned by Zuckerberg (about 28%).

The are two types of secondary offerings.

• A dilutive secondary offering involves creating new shares and offering them for public sale, usually near current price.

• A non-dilutive secondary offering involves sale of existing shares by major stockholders who receive the proceeds. This is what happened when Facebook sold 71 million shares to the public (41 million by Zuckerberg).

2. After IPO, if the company wants to issue more stocks, does it issue at the market value?

Yes - it sells the new shares to the public for whatever they're willing to pay for it. Technically there's often an intermediary that buys all of the shares then help distribute them in the secondary market (since Facebook is not in the stock trading business), but the initial price is what the intermediary thinks they'll be worth on the open market.

3. When the company goes public (IPO), how do shareholders keep their company ownership with such tremendous participation from the public?

They either keep a class of shares that does not dilute when new shares are issued, or they just accept the loss in ownership percentage by having a smaller piece of a bigger pie.

If you owned 10 shares (10%) of a farm worth $100, and the farm issued 100 more shares (say to buy more land) for another $100, you'd still own 10 shares (5%) of a company that's now worth $200. So your total value stays the same even though you have half of the ownership (percentage-wise) that you did before.