primary offering

Here is a mistake many first time investors make without even realising it. Someone hears that a big company is 'listing on the stock exchange' and they rush to buy shares from a friend who already holds some, thinking that counts as getting in early. It does not. Buying from your friend is a secondary transaction, the money moves from your pocket to his, and the company never sees a kobo of it.

A primary offering is different. It is the moment a company itself creates new shares and sells them directly to investors, and the cash raised goes into the company's account to fund its plans, whether that is opening new branches, paying down debt, or expanding a factory. This is the real 'ground floor' moment people talk about, not buying from someone who already owns the stock.

Think of Dangote Cement or Airtel Africa when they raise fresh capital through the Nigerian Exchange. If you buy shares during that primary offering, your money becomes part of the company's working capital. Once trading starts and people begin buying and selling those same shares among themselves, every later transaction is secondary, the company is no longer collecting anything from those trades.

In the United Kingdom, this happens when a company does an Initial Public Offering, an IPO, on the London Stock Exchange, or when an already listed company does a rights issue to raise more funds. A Nigerian in London might get an email from their broker about a rights issue for a bank they hold shares in, that is a primary offering too, existing shareholders being offered new shares directly from the company.

For someone abroad sending money home to invest, this distinction matters because primary offerings often come with a set price and a limited window to apply, so timing and paperwork count. Miss the offer period and you can only buy afterwards on the open market, at whatever price the crowd has settled on.