| the sale of a large block of outstanding stock off the floor of an exchange, usually by a major stockholder. |
| secondary offering n. The sale of a large block of outstanding stock through dealers outside a stock exchange. |
Secondary Offering
A sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings. The underwriting proceeds are paid to the stockholders, rather than to the corporation.
Investopedia Commentary
Typically, such an offering occurs when the founder of a business (and perhaps some of the original financial backers) determine that there is more to be gained by going public than by staying private. The offering does not increase the number of shares of stock outstanding.
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See also: Dilution, Follow-on Offering, Impact Day, Right, S-3 Filing, Takedown