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. Initial Public Offering - IPO

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

    1. The issuance of new stock for public sale from a company that ...
  6. Open Offer

    A secondary market offering that is similar to a rights issue ...
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. Investing Basics

    How Does Alibaba Make Money? A Simple Guide

    Alibaba broke IPO headlines--but making news and making money are two different things.
  5. 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.
    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.
  6. 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.
  7. Despite a booming market, some IPOs crashed and burned. Sure, going public brings a flood of capital, but it can also expose a company to unpredictable market forces.
    Investing News

    IPO Stinkers: The Biggest IPO FAILS of 2014

    Despite a booming market, some IPOs crashed and burned. Sure, going public brings a flood of capital, but it can also expose a company to unpredictable market forces.
  8. Investing News

    What is Alibaba?

    Alibaba might not yet have the name recognition of other ecommerce players like Amazon, but with its record-breaking IPO, it's due to be a global player.
  9. Investing Basics

    The Top Five Alibaba Shareholders

    In addition to the new public shareholders, BABA has several prominent major stakeholders. Here are the top five.
  10. Investing

    The Top Chinese Companies Traded In The U.S.

    While many Chinese companies trade only on foreign exchanges, some of the top Chinese companies who trade in the United States are global industry leaders.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center