Issuing Corporate Securities - Types Of Offerings

Securities that are being sold under a prospectus may include securities that are part of different types of offerings. The different types of offerings include initial public offerings, subsequent primary offerings, and registered secondary offerings.

Initial Public Offering (IPO) / New Issue

An initial public offering is the first time that a company has sold its stock to the public. The issuing company receives the proceeds from the sale minus the underwriter’s compensation.

Subsequent Primary / Additional Issues

In a subsequent primary offering, the corporation is already publicly owned and the company is selling additional shares to raise new financing.

Primary Offering vs. Secondary Offering

In a primary offering, the issuing company receives the proceeds from the sale minus the underwriter’s compensation. In a secondary offering, a group of selling shareholders receives the proceeds from the sale minus the underwriter’s compensation. A combined offering has elements of both the primary offering and the secondary offering. Part of the proceeds goes to the company and part of the proceeds go to a group of selling shareholders.

Awarding The Issue


Related Articles
  1. Professionals

    Secondary Offerings and Shelf Distributions

    Secondary Offerings and Shelf Distributions
  2. Professionals

    C. Underwriting Corporate Securities

    Once a business has decided that it needs to raise capital to meet its organizational objectives, they must determine how to raise the needed capital. Most corporations at this point will hire ...
  3. Professionals

    Primary Market

    Primary Marketplace
  4. Investing Basics

    What is the Secondary Market?

    The secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
  5. Professionals

    Types of Markets

    CFA Level 1 - Types of Markets. Learn the differences between primary and secondary markets. Looks at where securities are issued and where they will trade after being sold.
  6. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  7. Investing Basics

    What's a Secondary Offering?

    A secondary offering is the issuance of new stock from a company that has already made its initial public offering.
  8. Markets

    Comparing Primary And Secondary Capital Markets

    In the primary capital market, investors buy directly from the issuing company. In the secondary market, investors trade securities among themselves.
  9. Professionals

    Public Issue And Cash Offer

    These are just two ways that companies can raise capital.
  10. Professionals

    New Issue Market

    FINRA Series 6 Exam Study Guide - New Issue Market. In this section: IPOs, underwriter and several kinds of underwriting agreements.
RELATED TERMS
  1. Secondary Offering

    1. The issuance of new stock for public sale from a company that ...
  2. Subsequent Offering

    An offering of additional shares after the issuing company has ...
  3. Primary Distribution

    The original sale of a new security issue (bonds or stocks) from ...
  4. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  5. Impact Day

    The date on which a corporation makes a secondary offering of ...
  6. Open Offer

    A secondary market offering that is similar to a rights issue ...
RELATED FAQS
  1. What is the average range for the price-to-earnings ratio in the electronics sector?

    Understand the difference between the primary market and the secondary market, and learn which investors are able to participate ... Read Answer >>
  2. What is the difference between a primary and secondary financial market?

    Learn about primary and secondary financial markets, how investors use these markets and the difference between primary and ... Read Answer >>
  3. What's the difference between primary and secondary capital markets?

    Learn how in the primary capital market, securities are issued for the first time, while in the secondary market, investors ... Read Answer >>
  4. What is the difference between an IPO and a seasoned issue?

    Learn how companies issue IPO securities when they first go public and seasoned issue shares if they sell more shares in ... Read Answer >>
  5. Who trades in primary and secondary capital markets?

    Understand how primary and secondary markets function in the trade of financial securities between investors, and learn how ... Read Answer >>
  6. When does a primary market become a secondary market?

    Understand the difference between the primary and secondary markets and why the secondary market is where investors go to ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center