What is a Secondary or Follow-On Offering? How do they work?

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A Secondary or Follow-on Offering is when an already public company registers additional shares. The shares could be newly issued by the company to raise additional capital or a sale by an existing shareholder, or both. A Marketed Secondary Offering is marketed for 3 to 5 days and then priced. In an overnight offering, or sometimes called a Spot Secondary Offering, the offering is announced and priced right after the market closes. Most Secondary Offerings are priced below the closing price of the stock to create an incentive for investors.

In a Marketed Secondary, you will have several days to place an order. In an overnight or spot offering, you will only have 60-90 minutes to place an order. If you recieve any Secondary Offering shares, they will be allocated to you, and appear in your account before the market opens the next morning.

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