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.

RELATED TERMS
  1. Overvalued

    A stock with a current price that is not justified by its earnings ...
  2. Rights Offering (Issue)

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

    A type of offer made in response to another offer, which was ...
  4. Dilution

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

    The first of issuance of stock for public sale from a private ...
  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 >>
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