Primary Offering


DEFINITION of 'Primary Offering'

The first of issuance of stock for public sale from a private company. This is the means by which a private company can raise equity capital through the financial markets in order to expand its business operations. This can also include debt issuance.

Also known as an "initial public offering" (IPO).

BREAKING DOWN 'Primary Offering'

A primary offering is usually done to help a young, growing company expand its business operations, but can also be done by a mature company that still happens to be a private company. Primary offerings can be followed by secondary offerings, which serve as a way for a company that is already publicly traded to raise further equity capital for its business. After the offering and the receipt of the funds raised, the securities are traded on the secondary market, where the company does not receive any money from the purchase and sale of the securities they previously issued.

  1. Primary Distribution

    The original sale of a new security issue (bonds or stocks) from ...
  2. Repackaging

    When a private equity firm takes a public firm private by purchasing ...
  3. Spot Secondary

    The sale of a previously issued security that does not require ...
  4. Direct Public Offering - DPO

    When a company raises capital by marketing its shares directly ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Secondary Offering

    1. The issuance of new stock for public sale from a company that ...
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  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does investment banking differ from commercial banking?

    Investment banking and commercial banking are two primary segments of the banking industry. Investment banks facilitate the ... Read Full Answer >>
  4. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
  5. Why would a company decide to utilize H-shares over A-shares in its IPO?

    A company would decide to utilize H shares over A shares in its initial public offering (IPO) if that company believes it ... Read Full Answer >>
  6. How do I place a buy limit order if I want to buy a stock during an initial public ...

    During an initial public offering, or IPO, a trader may place a buy limit order by choosing "Buy" and "Limit" in the order ... Read Full Answer >>

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