Definition of Public offering

Public offering

The sale of registered securities by the issuer (or the underwriters acting in the interests of the
issuer) in the public market. Also called public issue.

Public offering

The sale of new securities to the investing public.

Initial public offering (IPO)

A company's first sale of stock to the public. Securities offered in an IPO are
often, but not always, those of young, small companies seeking outside equity capital and a public market for
their stock. Investors purchasing stock in IPOs generally must be prepared to accept very large risks for the
possibility of large gains. IPO's by investment companies (closed-end funds) usually contain underwriting
fees which represent a load to buyers.

initial public offering (IPO)

First offering of stock to the general public.

Initial Public Offering

A firms first offering of its shares to the investment public, after registration requirements of the various securities regulators have been met.

General cash offer

A public offering made to investors at large.

Registration statement

A legal document that is filed with the SEC to register securities for public offering.

Regulation A

The securities regulation that exempts small public offerings, those valued at less than
$1.5MM, from most registration requirements with the SEC.

Underwriting fee

The portion of the gross underwriting spread that compensates the securities firms that
underwrite a public offering for their underwriting risk.

Winners's

curse Problem faced by uninformed bidders. For example, in an initial public offering uninformed
participants are likely to receive larger allotments of issues that informed participants know are overpriced.

Go public

The process of offering a company’s shares for sale to the public through an
initial public offering.

IPO

See initial public offering.

private placement

Sale of securities to a limited number of investors without a public offering.

Mezzanine

Stage of a company's development just prior to going public, in Venture Capital language. Venture capitalists entering at that point have a lower risk of loss than at previous stages and can look forward to early capital appreciation as a result of the Market Value gained by an Initial public offering.

Competitive offering

An offering of securities through competitive bidding.

Dual syndicate equity offering

An international equity placement where the offering is split into two
tranches - domestic and foreign - and each tranche is handled by a separate lead manager.

Negotiated offering

An offering of securities for which the terms, including underwriters' compensation,
have been negotiated between the issuer and the underwriters.

Offering memorandum

A document that outlines the terms of securities to be offered in a private placement.

Primary offering

A firm selling some of its own newly issued shares to investors.

Public Securities Administration (PSA)

The trade association for primary dealers in U.S. government
securities, including MBSs.

Public warehouse

Warehouse operated by an independent warehouse company on its own premises.

Publicly traded assets

Assets that can be traded in a public market, such as the stock market.

Reoffering yield

In a purchase and sale, the yield to maturity at which the underwriter offers to sell the bonds
to investors.

Rights offering

Issuance of "rights" to current shareholders allowing them to purchase additional shares,
usually at a discount to market price. Shareholders who do not exercise these rights are usually diluted by the
offering. Rights are often transferable, allowing the holder to sell them on the open market to others who may
wish to exercise them. Rights offerings are particularly common to closed end funds, which cannot otherwise
issue additional common stock.

seasoned offering

Sale of securities by a firm that is already publicly traded.

Public Debt

See national debt.

Publicly Held National Debt

See national debt.

Walsh-Healey Public Contracts Act of 1936

A federal Act that forces government contractors to comply with the government’s minimum wage and hour rules.

Public Oversight Board

An independent private-sector body that oversees the audit practices
of certified public accountants who work with SEC-regulated companies.

Offering Memorandum

A "prosperous-like" document providing detailed descriptions of a company's past, present, and prospective business operations. It is normally prepared for the use of potential purchasers of securities offered under the seed capital or private placement prospectus exemptions.

Direct placement

Selling a new issue not by offering it for sale publicly, but by placing it with one of several
institutional investors.

Standby fee

Amount paid to an underwriter who agrees to purchase any stock that is not subscribed to the
public investor in a rights offering.

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