Impact Day

DEFINITION of 'Impact Day'

The date on which a corporation makes a secondary offering of its shares available for sale to the public. Such a secondary offering increases the total number of outstanding shares, therefore, existing shareholders will own a smaller percentage of the company and earnings per share will decline. As a result of these changes, the stock's price may decline on, or shortly after, impact day.

BREAKING DOWN 'Impact Day'

The purpose of a secondary offering, also called an add-on, could be to raise capital for a new project or business expansion or to increase working capital. As with an initial public offering, an underwriter will assist the company in determining the number of shares to offer, establishing a share price and selecting the right date for impact day.




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RELATED FAQS
  1. Why are the trades that occur in the secondary market important to a firm?

  2. What constitutes a secondary market?

    Find out what constitutes a secondary market, and learn why that term can be applied far more broadly than you might initially ... Read Answer >>
  3. Why do share prices fall after a company has a secondary offering?

    The best way to answer this question is to provide a simple illustration of what happens when a company increases the number ... 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. Why do we need a secondary market?

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  6. 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 >>
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