Secondary Offering

A secondary offering is a sale of stock by a company that is already public, priced and marketed like a mini-IPO. When the company issues new shares, the raise is dilutive — every existing holder owns a smaller slice. When existing insiders sell their own shares, the company gets nothing and the share count is unchanged, but a large holder is cashing out.

Offerings price at a discount to the last trade, commonly 3-10%, to entice buyers into taking down size. The announcement alone usually knocks the stock toward the expected pricing range, and small caps that fund operations through repeated dilutive raises can grind lower for years under the overhang.

Context decides the read. A profitable company raising to fund a specific acquisition is different from a cash-burning biotech that raises every time the stock rallies — the second pattern caps every rally at the next offering.