IPO University

When a company that is already traded registers shares to be sold to the public via an underwritten offering. Like IPOs, follow-on offerings can consist of new primary shares that raise capital but dilute existing owners, secondary shares held by insiders that do not raise capital for the company or dilute other owners, or a combination of both. In addition, follow-on offerings increase the liquidity of the stock to attract additional holders and trading activity. Follow-ons are also referred to as secondaries, though technically that only applies to offerings sold by existing shareholders.