Secondary Offering

What this video covers

• The textbook definition of a secondary offering (also called a secondary distribution): existing shareholders selling to the public, not the issuer
• Who pockets the proceeds in a secondary offering, and why the company's bank account is completely unaffected
• Why a secondary offering is non-dilutive: no new shares are created, so total shares outstanding stay identical
• Which insiders typically run secondary offerings (founders, officers and directors after lockup, venture capital and private equity, large institutional holders)
• The primary-vs-secondary head-to-head: seller, cash recipient, new shares created, and dilution effect
• Why a follow-on offering (seasoned equity offering) is actually a primary offering, and the media trap of calling any post-initial public offering (IPO) sale a "secondary"
• Combination offerings where new issuer shares (primary, dilutive) and insider shares (secondary, non-dilutive) sell side by side in the same deal