At A Discount

AAA

DEFINITION of 'At A Discount'

This specifically refers to stock that is sold for less than its nominal or par value. At a discount also refers to stocks or other securities that are sold below the present market value, similar to a sale on goods at a retail establishment.

The nominal or par value for a security, which is detailed in the company charter, is the minimum price that a stock of a particular class can be sold for upon an initial public offering. Most states have laws preventing companies from issuing stock at a price less than par.

INVESTOPEDIA EXPLAINS 'At A Discount'

The nominal or par value of a stock arguably has no relation to the market price. In fact, many stocks today aren't even issued with a par value; and those that are often have values that don't in any way relate to the issuing price. For example, in 2012 Google's convertible preferred shares have a par value of $0.001 per share. Selling a stock below market value, on the other hand, is far more common and is typically done as a means of enticing buyers or creating buzz.

RELATED TERMS
  1. At A Premium

    The sale of an asset or item at a price significantly above the ...
  2. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  3. Intrinsic Value

    1. The actual value of a company or an asset based on an underlying ...
  4. Premium

    1. The total cost of an option. 2. The difference between the ...
  5. Discount

    The condition of the price of a bond that is lower than par. ...
  6. Rediscount

    The act of discounting a short-term negotiable debt instrument ...
Related Articles
  1. Alibaba's Goal: Supplant eBay, Amazon ...
    Stock Analysis

    Alibaba's Goal: Supplant eBay, Amazon ...

  2. The Government And Risk: A Love-Hate ...
    Insurance

    The Government And Risk: A Love-Hate ...

  3. Can Good News Be A Signal To Sell?
    Fundamental Analysis

    Can Good News Be A Signal To Sell?

  4. Beware Of Wall Street's Three Big Lies
    Fundamental Analysis

    Beware Of Wall Street's Three Big Lies

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center