Talk:Secondary market offering

Merge

You shouldn't confuse "follow-on offering" with "secondary offering." But don't feel bad, even Justice Scalia made this mistake in a U.S. Supreme Court decision (Gustafson).—Preceding unsigned comment added by 195.33.122.127 (talk) 14:42, 30 October 2006

Unless someone can explain the salient difference between the two concepts, then these two articles should be merged. --Eastlaw (talk) 05:20, 28 November 2008 (UTC)

供股發行 (Rights Issue) 根據現有證券持有人的持有證券比率，給予他們認購證券權利。 —Preceding unsigned comment added by 70.74.206.141 (talk) 01:16, 7 March 2009 (UTC)

In my view, the distinctions between the concepts are important and should be maintained. A "follow-on offering" refers to an offering after the "initial offering." A "secondary offering" is a (non-dilutive) offering of existing shares from current shareholders. The word "secondary" distinguishes such an offering from a "primary offering," where the shares are sold by the company. Primary offerings are typically dilutive, but can be non-dilutive, e.g., in a rights offering. Please note that an initial public offering can include a secondary offering. The article states that "follow-on offerings" are sometimes referred to as "secondary offerings." While some follow-on offerings are indeed secondary offerings (at least in part), people who don't understand the distinctions are prone to misuse "secondary offering" as a synonym for "follow-on offering." Jeddem (talk) 18:20, 15 May 2009 (UTC)

• I agree with Jeddem. Investopia agrees as well, although it says that secondary offering has two definitions. Some people refer to secondary (I prefer to use the word subsequent) public offerings as "secondary offerings", but secondary oferings are different. I suggest that we avoid using the word "secondary" in the title of this article because it can easily be confused with shares traded on the "secondary market" (ie, the exchange). I suggest that we retitle this article to "Subsequent offering", a word which has a precedent as Investopedia defines it [1]. Subsequent offerings are just shares sold after the IPO -- sometimes they are sold as private placements for registration later (the PIPE, or private investment in public equity). Both PIPEs and plain vanilla "subsequent public offerings" are dilutive to shareholders. However, "secondary offerings" can refer to the sale of large blocks of stock by initial owners, and these are not dilutive. II | (t - c) 19:13, 19 June 2009 (UTC)

• Merge I looked for, and failed to find, actual usage of follow-on offering. Where is there a usage of follow-on where they are not also using in the same context secondary offering. I conclude that not only does Justice Scalia but everyone is making this alleged error -- including the one citation for follow-on here "Google's follow-on offering raises $4.18 billion".

Google has raised $4.18 billion in a secondary offering, as investors try to add to their holdings of a stock that has more than tripled in value since the company's initial offering a year ago.

When people want to make the distinction, and it is an important distinction, they will say dilutive secondary offering or non-dilutive secondary offering. If you want to make the case for keep separate, find a recent free-standing usage of follow-on offering. patsw (talk) 18:49, 11 August 2009 (UTC)

See Investopedia's definition of the two meanings for the term 'secondary offering' [2]. Secondary offering has two meanings, while synonyms like 'follow-on' or 'subsequent offering' have one. II | (t - c) 19:01, 11 August 2009 (UTC)

Forbes (magazine) is the parent of Investopedia. I will present to them that the schema is:

• Primary offering, and secondary offering (of which there are two kinds: a dilutive offering to raise new capital (and sometimes called "follow-on") and a non-dilutive offering, outstanding, but closely-held or otherwise restricted shares become public.)
• The view opposed to mine is there there are three in the schema: primary, secondary, and follow-on; where, it is always an incorrect usage of "secondary" to refer to newly issued shares, ie dilutive.

I'm still looking for a free-standing reference to "follow-on offering" which doesn't also describe it as "secondary" patsw (talk) 11:55, 14 August 2009 (UTC)

Forbes/Investopedia did not reply to my question. I hold that as a matter of definition, all follow-on offerings are secondary offerings. I'm looking for a counter-example. patsw (talk) 20:33, 17 August 2009 (UTC)

• Keep separate or merge clearly. There is clearly a difference between the two ideas, and it is perhaps best to note that "secondary market" and "primary market" are ideas relevant to the meaning of "secondary market offering", which can be understood as an offering which takes place solely on the "secondary market", compared to a follow-on offering which is a primary-market offering which is subsequent to an initial offering. It is quite difficult to find information about whether a company might make a follow-on offering (dilutive secondary offering), or whether this is even possible. Searching for "secondary public offering" leads you to this page, when in fact what you're really after is information about a dilutive subsequent offering from the company itself. Ideally information about the non-dilutive and dilutive secondary offerings should be given on the IPO article. 93.97.40.124 (talk) 21:09, 19 November 2010 (UTC)

• There seems to be a difference in australia between a secondary offering and a follow-on offering, with the market actually using the marker FPO to distinguish. —Preceding unsigned comment added by 124.180.174.98 (talk) 00:16, 2 December 2010 (UTC)

When a company sells stock to the public for the first time in an SEC-registered offering, this is an Initial Public Offering (IPO). Subsequent sales of stock to the public by the company are called follow-on offerings. If major shareholders of a company wish to sell their shares, subject to the company’s agreement, the shares can be sold using the company’s registration statement, enabling a broad selling effort. This is called a selling shareholder offering (or a secondary offering), and the agreement to use the company’s registration statement is called a registration rights agreement. Source: An Introduction to Investment Banks, Hedge Funds, and Private Equity: The New Paradigm, Chapter 3, Financings.--Wall Street CEO (talk) 05:45, 9 October 2011 (UTC)