Final answer:
A subsequent issuance of new shares to the public after an IPO is called a secondary offering, which allows the company to raise additional capital.
Step-by-step explanation:
When a firm issues new shares to the public after an initial public offering (IPO), it is known as a secondary offering. The IPO is the firm's first stock sale to outside investors and is crucial because it helps repay early investors such as angel investors and venture capital firms, who may have significant ownership in the firm. The secondary offering, like the IPO, can provide additional funds for the company to expand operations or to improve its financial health.
A secondary offering differs from the IPO in that it is not the first time the firm's shares are sold to the public. Furthermore, during the sale of new stock, the firm directly receives capital, which can again be used for business growth, repaying debt, or other corporate purposes. This process is distinct from when one shareholder sells stock to another, in which the company does not receive any funds from the transaction.