Treasury Offering

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. Corporate Finance

    1) The financial activities related to running a corporation. ...
  4. Fixed-Income Security

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

    A reduction in the ownership percentage of a share of stock caused ...
  6. Poison Put

    A takeover defense strategy in which the target company issues ...
RELATED FAQS
  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 >>
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

    Explaining Tender Offers

    A tender offer is a broad public offer made by a person or company to purchase all or a portion of the shares of a publicly traded company.
  7. Fundamental Analysis

    Can Japan's Stewardship Code Turn Passive Funds Into Active Managers?

    Institutional investors in Japan have been criticized for being too cozy with corporates. Can a code force them to focus on the needs of beneficiaries?
  8. Investing Basics

    Explaining Non-Controlling Interest

    Technically, a non-controlling interest is any percentage of ownership that is less than 50% of a company’s voting equity.
  9. Entrepreneurship

    Comparing Impact Investing & Venture Philanthropy

    Impact investing and venture philanthropy might be similar, but there are differences and one is more popular than the other right now.
  10. Investing Basics

    Explaining Privatization

    For a publicly traded company, privatization is the act of transitioning the company to ownership by private individuals.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. 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 ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. 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 ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
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!