Gross Spread

Dictionary Says

Definition of 'Gross Spread'

The difference between the underwriting price received by the issuing company and the actual price offered to the investing public. The gross spread is the compensation that the underwriters of an initial public offering (IPO) make to cover expenses, management fees, commission (or takedown) and risk. The majority of profits that the underwriting firm earns through the deal are often achieved through the gross spread. In addition to the gross spread, an initial public offering typically involves "fixed costs," such as legal and accounting consultants, and registration fees.
Investopedia Says

Investopedia explains 'Gross Spread'

A company, for example, may receive $36 per share for its initial public offering. If the underwriters sell the stock to the public at $38 per share, the gross spread - the difference between the underwriting price and the public offering price - would be $2 per share. The gross spread value can be influenced by variables such as the size of the issue, risk and volatility. Also called "gross underwriting spread," "spread" or "production."

Articles Of Interest

  1. The 5 Best And Worst IPOs

    The market for equities has gone through numerous crises, but when an IPO hits the market, it can create lots of excitement for investors and can generate billions of dollars for the company.
  2. Famously Disappointing IPOs

    IPOs may seem like an enticing and exciting investment, but history suggests that IPOs are far from a sure thing.
  3. IPOs For Beginners

    IPO is one of the few market acronyms that almost everyone is familiar with. Discover if IPOS are worth all the attention.
  4. 5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  5. Top IPO Nations

    We'll look at which countries lead the world in IPOs and how that correlates with their economic health.
  6. How An IPO Is Valued

    The initial valuation of an IPO can determine the success or failure of a specific stock - but how is that price determined?
  7. Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  8. IPO Basics Tutorial

    What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
  9. Coty Readies IPO

    Fragrance maker Coty filed a registration statement amendment May 28 that sees it raising as much as $1.2 billion from its IPO. Coty tried to buy Avon for $10.7 billion in 2012 but was unsuccessful. ...
  10. Ski-Doo IPO Raises $254 Million: Should You Buy?

    Read on and I'll look into if you should buy Ski-Doo's stock once it becomes available.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.
  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.
  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.
  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.
  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=18ca99a721b5361a42b40575c8af2348