Buoyed by a recent investment from Wal-Mart Stores Inc., prepaid card company Green Dot Corp. said this week that it will not retain any of the proceeds from its upcoming initial public offering.

The decision to sell only secondary shares — those held by existing investors — in an IPO is unusual but not unheard of, finance experts said.

In some cases, such a move could signal that the company is not confident there would be a market for its shares, or that current financial backers, including management, are looking for a way to cash out.

But in Green Dot's case, a 100% secondary offering likely is more reflective of its strong balance sheet and that it has no immediate need for new capital to operate, IPO consultants said.

"Presumably the Wal-Mart investment took care of the near-term cash requirements, but they've already gone through the time and effort to prepare for an IPO," said Lise Buyer, the principal of Class V Group, a Palo Alto, Calif., IPO consulting firm.

While Green Dot may not need the cash that would be generated by selling new shares in a public offering, moving forward allows the company to establish a market for its stock and retain the option of doing so in the future, she said.

"My assumption is, even though they have the money piece checked off, they wanted to go public for the sake of the independent third-party valuation and liquid security," she added.

Green Dot, of Monrovia, Calif., disclosed Tuesday in an amended S-1 filing with the Securities and Exchange Commission that it will not retain any of the proceeds from its IPO because all shares to be sold are held by existing investors.

The filing included an updated list of its principal and selling stockholders but did not specify if and how many shares the stockholders could sell. The company, which first announced its IPO plans in February, has not yet disclosed an expected price range for its stock or when its shares will be publicly listed.

In its previous filings, Green Dot said it would use its IPO proceeds to fund normal business operations and acquisitions.

For example, the company is attempting to buy Bonneville Bancorp, a Provo, Utah, bank holding company, for $15.75 million, which would let it issue prepaid cards directly to consumers instead of through partner banks.

Earlier this month, Green Dot announced it had issued 2,208,552 shares of class A common stock to Wal-Mart, its only class A stockholder, as part of a five-year extension to the companies' existing business agreement.

Sales at Wal-Mart accounted for 63% of Green Dot's operating revenue in the first quarter. Wal-Mart's shares vest over five years.

Steve Streit, Green Dot's chairman, president and chief executive, declined to discuss the new IPO approach. After the Wal-Mart announcement, he said the investment gives them "an economic interest in Green Dot as we continue to grow."

Green Dot's largest holders of class B stock, which has greater voting power, include Sequoia Capital, a venture capital firm that owns 12.1 million, or 31.9%, of its class B shares; Streit, who owns 5.02 million, or 13%, of its class B shares; and TTP Fund LP, which owns 4.1 million, or 10.8%, of its class B shares.

Green Dot provides Wal-Mart's MoneyCard, which is issued by GE Money Bank, a subsidiary of General Electric Co.

That a company would chose to offer only secondary shares through an IPO might spook investors, according to Kathy Smith, a principal with Renaissance Capital LLC, an IPO research firm in Greenwich, Conn.

But because Green Dot has strong cash flow and no long-term debt, "I don't know if they really need to raise the money" right now, she said.

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