Follow-On Offering


DEFINITION of 'Follow-On Offering'

An issue of shares of stock that comes after a company has already issued an initial public offering (IPO). A follow-on offering can be diluted, meaning that the new shares will lower a company's earnings per share (EPS), or undiluted, if the additional shares are preferred. A company looking to offer additional shares, registers the offering with regulators which includes a prospectus of the investment.

BREAKING DOWN 'Follow-On Offering'

Unlike an IPO, which includes a price range that the company is looking to sell shares at, the price of a follow-on offering is market-driven. Because the company is already publicly traded, it has been consistently valued by investors for at least a year before the follow-on offering is floated. Thus, any investment bank working on the offering will often focus on marketing efforts, rather than valuation.

  1. SEC MEF Filings

    SEC filings that concern registration of up to an additional ...
  2. Rights Offering

    An issue of rights to a company's existing shareholders that ...
  3. Offering Memorandum

    A legal document stating the objectives, risks and terms of investment ...
  4. Secondary Offering

    1. The issuance of new stock for public sale from a company that ...
  5. Direct Public Offering - DPO

    When a company raises capital by marketing its shares directly ...
  6. Spot Secondary

    The sale of a previously issued security that does not require ...
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