Treasury Offering


DEFINITION of 'Treasury Offering'

The issuance of an additional class of security already existing in a firm's treasury. During a treasury offering a company needs to raise more money, but doesn't want any extra debt, so they will often issue extra shares of its currently trading equity. Of course, there is a downside to treasury offerings; they are often the cause of dilution for existing shareholders (also defined as sunk costs). These are costs that cannot be reversed.

BREAKING DOWN 'Treasury Offering'

These company shares are unlike regular shares that are marked as outstanding in the company's financial statements. These are not considered outstanding nor are they used to calculate dividends or earnings per share. Sometimes this treasury stock refers to stock that has been bought back by the corporation from shareholders. Since these were shares that were previously in the market, the funds spent the first time issuing the stock are now considered a sunk cost. This transaction lessens shareholder claim to the companies' earnings or assets.

  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. ...
  2. Bureau Of Public Debt

    An agency of the United States Department of the Treasury that ...
  3. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
  4. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic ...
  5. Corporate Finance

    1) The financial activities related to running a corporation. ...
  6. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
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