Why can the issue price of a stock exceed its face value?

The face value is linked to the share capital, reflecting the initial investment of the enterprise.

The stock issue price is linked to the enterprise value, which reflects the profitability and market expectation of the enterprise.

For example, you spend 65,438 yuan to start a company, and then you often make money. The company is worth 500 thousand.

When you issued shares, you said 1 yuan per share, 65,438+10,000 shares.

Stock issue price, investment banks and subscribers think that the company is worth 500,000 or 800,000, so each share should be 5 yuan or 8 yuan.

The issue price of a stock can't be lower than its face value, because without management ability, a company that doesn't make money can't go public. theoretically

Below the face value, it will be forced to withdraw from the market, so some companies will merge their shares.