Secondary Equity Offerings
Content
Definition
Secondary Equity Offerings are offerings of new stock by a company that has already gone public, which can dilute existing shares but also raise additional capital.
Usage and Context
Secondary equity offerings involve issuing new shares by a public company to raise capital, which can dilute the value of existing shares.
Frequently asked questions
- What is a secondary equity offering? A secondary equity offering occurs when current shareholders sell their shares to the public after the company has gone public.
- What is the difference between primary and secondary equity offerings? Primary equity offerings involve a company selling new shares to raise capital, while secondary equity offerings involve current shareholders selling their existing shares.
- What is the difference between an IPO and a secondary offering? An IPO is the first public sale of a company`s shares, while a secondary offering is when existing shareholders sell their shares after the IPO.
Benefits
Secondary equity offerings are new stock offerings by a public company to raise additional capital, potentially diluting existing shares.
Conclusion
Secondary equity offerings raise money for a public company but may dilute the shares of existing investors.
