Spot Secondary

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DEFINITION of 'Spot Secondary'

The sale of a previously issued security that does not require a Securities and Exchange Commission (SEC) registration statement. Certain requirements must be met to avoid registration. A spot secondary offering is typically offered to institutional investors instead of the general public. A secondary distribution differs from a spot secondary in that the former is required to be registered with the SEC.

BREAKING DOWN 'Spot Secondary'

A spot secondary offering is not registered with the SEC and, as such, can typically be performed more quickly than other types of secondary offerings. Shares that are issued through a spot secondary offering are typically priced at a discount to institutional investors. A managing underwriter, or bookrunner, generally acts as an agent for the firm in purchasing, carrying and distributing the spot secondary offering.

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RELATED FAQS
  1. Why do share prices fall after a company has a secondary offering?

    The best way to answer this question is to provide a simple illustration of what happens when a company increases the number ... Read Full Answer >>
  2. What happens when a company buys back its shares?

    When a company performs a share buyback, there are a few things that the company can do with the securities they buy back. ... Read Full Answer >>
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    Privately-held companies are - no surprise here - privately held. This means that, in most cases, the company is owned by ... Read Full Answer >>
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