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. 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.
  2. Investing Basics

    The Road To Creating An IPO

    Through an Initial Public Offering, or IPO, a company raises capital by issuing shares of stock, or equity in a public market. Generally, this refers to when a company issues stock for the first ...
  3. Stock Analysis

    Adjusting Price Charts To Secondary Offerings

    Secondary offerings may require rapid readjustment of trading strategies.
  4. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  5. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  6. Retirement

    IPO Basics: Getting In On An IPO

    The Underwriting Process Getting a piece of a hot IPO is very difficult, if not impossible. To understand why, we need to know how an IPO is done, a process known as underwriting. When a company ...
  7. Active Trading Fundamentals

    Dow Theory: The Three-Trend Market

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.comAn important part of Dow theory is distinguishing the overall direction of the market. To do this, the theory uses trend ...
  8. Bonds & Fixed Income

    The Issuance Procedure of Corporate High-yield Bonds

    Issuing debt over equity can have several advantages for companies. Here we have a detailed look on the issuance procedure of corporate high-yield bonds.
  9. Investing

    Initial Public Offering (IPO) Explained

    An initial public offering (IPO) marks the start of a company's publicly traded life. Find out why companies undergo IPOs, and how the process works.
  10. Retirement

    IPO Basics: Conclusion

    Let's review the basics of an IPO: An initial public offering (IPO) is the first sale of stock by a company to the public. Broadly speaking, companies are either private or public. Going public ...
RELATED TERMS
  1. Secondary Offering

    1. The issuance of new stock for public sale from a company that ...
  2. Open Offer

    A secondary market offering that is similar to a rights issue ...
  3. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  4. Primary Market

    A market that issues new securities on an exchange. Companies, ...
  5. Primary Offering

    The first of issuance of stock for public sale from a private ...
  6. Offering Price

    The price at which publicly issued securities are made available ...
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. After an initial public offering, does a company profit from increases in its share ...

    The short answer is "no". To understand why, recall that the stock market is actually comprised of two markets - a primary ... Read Answer >>
  4. What securities does the primary market deal with?

    Find out what kinds of securities are traded on the primary market, including who can participate in trading and the basics ... Read Answer >>
  5. What kind of assets can be traded on a secondary market?

    Learn about the difference between the primary market and the secondary market, and what types of assets are traded on secondary ... Read Answer >>
  6. What does the underwriter do in a new stock offering?

    Learn the role an underwriter plays for an initial public offering, and the steps an underwriter takes in preparing for an ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center