Open Offer

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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.

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