Primary Distribution

AAA

DEFINITION of 'Primary Distribution'

The original sale of a new security issue (bonds or stocks) from a company to investors/shareholders. Proceeds from a primary distribution are sent directly to the issuing company. All bond offerings are considered primary distributions.


Also sometimes referred to as a "primary offering".

INVESTOPEDIA EXPLAINS 'Primary Distribution'

A "secondary distribution" is the opposite of a primary distribution and refers to an occurrence where an existing shareholder sells a block of previously-issued stock and takes the proceeds from the sale. A company only receives funds for a primary distribution, or IPO; the stock continues to trade after the initial offering, but the funds are exchanged between buyers and sellers.

RELATED TERMS
  1. Unseasoned Security

    A financial instrument that has only recently been made available ...
  2. Primary Offering

    The first of issuance of stock for public sale from a private ...
  3. Secondary Offering

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

    The first sale of stock by a private company to the public. IPOs ...
  5. Seasoned Security

    1. A financial instrument that has been publicly traded in the ...
  6. Dog And Pony Show

    A colloquial term that generally refers to a presentation or ...
Related Articles
  1. Insurance

    The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  2. Bonds & Fixed Income

    A Primer On Preferred Stocks

    Offering both income and relative security, these uncommon shares may work for you.
  3. Fundamental Analysis

    How The Sarbanes-Oxley Era Affected IPOs

    After the infamous collapse of companies like Tyco, Enron and WorldCom, the government responded to try and prevent it from happening again.
  4. Fundamental Analysis

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
  5. Professionals

    Wanna Be A Bigwig? Try Investment Banking

    A career in this high-stress field can be very rewarding for the right person. Find out if you have what it takes.
  6. Investing

    Additional Paid-In Capital

    Additional paid-in capital is an account in the equity section of a balance sheet. It represents the additional amount paid for the company’s shares over the par value of the shares. Additional ...
  7. Investing

    Top 10 Largest Global IPOs Of All Time

    We have compiled a list of the top 10 largest IPOs of all time. The results may surprise you.
  8. Investing Basics

    How Does Alibaba Make Money? A Simple Guide

    Alibaba broke IPO headlines--but making news and making money are two different things.
  9. Investing News

    5 IPOs That Broke The Markets In 2014

    In 2014, stock markets traded at record levels and the US IPO market enjoyed activity not seen since the 2000 tech bubble. Here is a snapshot of some of the year’s most successful IPOs.
  10. Investing Basics

    Alibaba IPO: Why List In the U.S.?

    For companies like Alibaba, a U.S. listing can provide some benefits that they can't find at the exchanges nearer to home.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center