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. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic ...
  4. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
  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 ...
Related Articles
  1. Investing Basics

    Will Corporate Debt Drag Your Stock Down?

    Borrowed funds can mean a leg up for companies or the boot for investors. Find out how to tell the difference.
  2. Investing Basics

    Stock Basics Tutorial

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

    Women And Finances: Is There A Gender Bias?

    Uncover some very complex reasons for female gender biases in the finance world.
  4. Bonds & Fixed Income

    A Look At National Debt And Government Bonds

    Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
  5. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  6. Investing Basics

    What Does a Transfer Agent Do?

    Transfer agents maintain the records and documents related to shareholder accounts.
  7. Taxes

    6 Reasons to Donate Your Car to Charity

    It's no longer a free ride, but there are still tax benefits to doing so.
  8. Economics

    What Does Vesting Mean?

    Vesting is the process of accruing non-forfeitable rights.
  9. Economics

    What's a Conglomerate?

    A conglomerate is a corporation that’s comprised of several different independent businesses.
  10. Investing Basics

    Breaking Down Optimal Capital Structure

    An optimal capital structure shows the best balance of debt to equity a company can have in order to minimize its cost of capital.
  1. How do modern companies assess business risk?

    Before a business can assess or mitigate business risk, it must first identify probable or likely risks to its bottom line. ... Read Full Answer >>
  2. Why has emphasis on corporate governance grown in the 21st century?

    Corporate governance refers to operational practices, management protocols, and other governing rules or principles by which ... Read Full Answer >>
  3. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  4. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
  5. What is the difference between a direct and an indirect distribution channel?

    A direct distribution channel is organized and managed by the firm itself. An indirect distribution channel relies on intermediaries ... Read Full Answer >>
  6. How can an investor determine a company's annual return from looking at its financial ...

    The funds in a share premium account cannot be used for a company's general expenses. These funds are restricted in terms ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
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!