SUBSEQUENT OFFERING Meaning and
Definition
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A subsequent offering refers to the issuance of additional securities by a company after its initial public offering (IPO). When a company initially goes public, it offers its shares to the public for the first time through an IPO. However, there are instances where the company may need to raise further capital or offer more shares to the market at a later date. This subsequent issuance of securities is known as a subsequent offering.
A subsequent offering can take various forms, such as a follow-on offering, secondary offering, or a rights offering. In a follow-on offering, the company offers additional shares of its stock to the public for sale. A secondary offering occurs when existing shareholders of the company decide to sell their shares to the public. On the other hand, a rights offering involves issuing new shares to existing shareholders in proportion to their current holdings, giving them the opportunity to purchase additional shares directly from the company.
The purpose of a subsequent offering is to raise additional funds for the company, which can be used for various purposes like financing expansion plans, repaying debt, funding research and development, or making acquisitions. It also provides an opportunity for existing shareholders to liquidate their investments or increase their ownership stake in the company.
Investors should carefully consider the terms and conditions of a subsequent offering, examining factors such as the offering price, dilution impact, and the company's future prospects.
Etymology of SUBSEQUENT OFFERING
The term "subsequent offering" consists of two words: "subsequent" and "offering". Here is the etymology of each word:
1. Subsequent:
The word "subsequent" comes from the Latin word "subsequens", which is the present participle of the verb "sequi" meaning "to follow". It entered English in the late 16th century, derived from the Latin "subsequens" or "subsequentis", eventually evolving into the word we use today.
2. Offering:
The word "offering" traces back to the Old English word "offrian" or "offrian", which means "to offer". It originated from the Latin word "offerre" which has the same meaning. The term "offering" has been in use in English since the late 14th century.
