Open Offer

AAA

DEFINITION of 'Open Offer'

A secondary market offering that is similar to a rights issue in which a shareholder is given the opportunity to purchase stock at a price that is lower than the current market price. The purpose of such an offer is to raise cash for the company.

INVESTOPEDIA EXPLAINS 'Open Offer'

An open offer differs from a rights issue in that investors are unable to sell the stocks that they purchase under the open offer to other parties. Some investors see a secondary market offering as bad news because it causes stock dilution and may signal that the stock is overvalued.

RELATED TERMS
  1. Subsequent Offering

    An offering of additional shares after the issuing company has ...
  2. Rights Offering

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

    A stock with a current price that is not justified by its earnings ...
  4. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
  5. Secondary Offering

    1. The issuance of new stock for public sale from a company that ...
  6. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
RELATED FAQS
  1. How does an IPO get valued? What are some good methods for analyzing IPOs?

    The price of a financial asset traded on the market is set by the forces of supply and demand. Newly issued stocks are no ... Read Full Answer >>
  2. What are the most effective ways to reduce moral hazard?

    There are a number of ways to reduce moral hazard, including the offering of incentives, policies to prevent immoral behavior ... Read Full Answer >>
  3. How do the C-suite members work together to make a successful company?

    Corporate managers, typically chosen by a board of directors in large organizations, are ultimately responsible to stakeholders ... Read Full Answer >>
  4. What are the Basel III rules, and how does it impact my bank investments?

    The Basel III rules are a regulatory framework designed to strengthen financial institutions by placing guidelines pertaining ... Read Full Answer >>
  5. What advantages do corporations have over privately held companies?

    The chief advantage that most publicly traded corporations enjoy – and the primary reason why private companies decide to ... Read Full Answer >>
  6. How does agency theory propose to deal with the agency problem?

    Agency theory highlights potential problems that may occur when agents and principals have different interests. Principals ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Understanding Rights Issues

    Not sure what to do if a company invites you to buy more shares at discount? Here are some of your options.
  2. Retirement

    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.
  3. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  4. Mutual Funds & ETFs

    Which ETF is the Best Bet: VTI or IWV?

    A look at two quality ETFs that offer diversification, low expense ratios, and exposure to the total market.
  5. Stock Analysis

    Why Should You Invest In Stratasys Today?

    When Stratasys pre-announced its fourth-quarter earnings, management highlighted that its MakerBot acquisition was underperforming expectations.
  6. Investing News

    Folio Investing Brings Experience To Robo-Advisors

    Prior to the recent upsurge of robo advisors, Folio Investing established itself as an alternative investment service through its online service.
  7. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  8. Investing Basics

    Are You An Investor Or Trader?

    Some stock market participants are investors or traders, and others are trying to do both. Often, they get in trouble by trying to do too much with little.
  9. Economics

    An Introduction to Government Loans

    Government loans further policymakers' efforts to create positive social outcomes by offering timely access to capital for qualified candidates.
  10. Investing News

    Two Lessons from Last Week’s Sell-Off

    September lives up to its reputation for weakness. Last week stocks suffered their worst pullback since the summer, although markets stabilized on Friday.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center