Subsequent Offering

AAA

DEFINITION of 'Subsequent Offering'

An offering of additional shares after the issuing company has already had an initial public offering (IPO). In a subsequent offering, the new shares are usually issued from the company's treasury, and the net offering proceeds go the company. Since a subsequent offering increases the company's shares outstanding, it has a dilutive effect, i.e., it dilutes the stakes of existing shareholders.

INVESTOPEDIA EXPLAINS 'Subsequent Offering'

A company may seek to complete a subsequent offering for a number of reasons. Investment demand for its shares may be high even after the initial offering, or it may look to raise capital to capitalize on new opportunities. Another reason could be that the company is looking to bolster its cash reserves at an opportune time, because it foresees funding challenges ahead. This may especially be the case for development-stage technology and biotechnology companies, which often have huge capital requirements in the initial years.

RELATED TERMS
  1. Add-On

    Additional shares put on the market by a company that has already ...
  2. SEC MEF Filings

    SEC filings that concern registration of up to an additional ...
  3. Impact Day

    The date on which a corporation makes a secondary offering of ...
  4. Open Offer

    A secondary market offering that is similar to a rights issue ...
  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 ...
RELATED FAQS
  1. How do corporate actions affect floating stock?

    Corporate actions, defined as a company's actions that affect the amount of outstanding company stock shares, can either ... Read Full Answer >>
  2. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    The primary advantages for a company of listing on the Nasdaq exchange are lower listing fees and lower minimum requirements ... Read Full Answer >>
  3. What securities does the primary market deal with?

    The primary market deals with all newly issued securities. When businesses, governments or other groups want to raise capital ... Read Full Answer >>
  4. What's the difference between investment banks and commercial banks?

    Investment banking and commercial banking are two divisions of the banking industry that provide substantially different ... Read Full Answer >>
  5. What are some of the key reasons a large corporation might prefer to remain a private ...

    The initial public offering (IPO) is often a rite of passage for large corporations. The lure of going public with an offering ... Read Full Answer >>
  6. Why is Manchester United (MANU) carrying so much debt?

    The takeover of Manchester United by the Glazer family beginning in 2005 saddled the historic club with substantial amounts ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Stock Basics Tutorial

    If you're new to the stock market and want the basics, this is the tutorial for you!
  2. Investing

    5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  3. Retirement

    IPO Basics Tutorial

    What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
  4. Economics

    What Happens in a Carve-Out?

    A carve-out happens when a corporation isolates part of its business and shares those profits with a third party.
  5. Entrepreneurship

    How to Exit Your Small Business with Grace

    Here is a guide for how best to leave your baby — your small business.
  6. Investing

    Which is the Better Bet: Amazon or eBay?

    Amazon and eBay are solid ecommerce companies, but the former is more innovative and diversified. Plus, a third is about to enter the fray.
  7. Investing

    Why Do Companies Choose NASDAQ for Their IPO?

    The NYSE is known for its prestige so why do some companies opt to list on the NASDAQ instead?
  8. Investing Basics

    From Startup To Blue Chip: The Success Story Of Gilead Sciences Inc.

    Learn how Gilead Sciences went from a startup to one of the more successful pharmaceutical companies in the industry, and learn about its major drugs.
  9. Entrepreneurship

    Should I Have An IPO on My Business

    The ultimate outside investment opportunity is going public through an initial public offering. However, IPOs come with costs that you may want to avoid.
  10. Fundamental Analysis

    Why Investment Bank IPO Valuations Go Wrong

    The costly services of investment banks don’t necessarily guarantee accuracy in IPO pricing.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!