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.

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