| best-efforts underwriting | An offering in which an underwriter agrees to distribute as much of the offering as possible and to return any unsold shares to the issuer.
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| cash offer | Apublic equity issue that is sold to all interested investors.
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| competitive offer | Method of selecting an investment banker for a new issue by offering the securities to the underwriter bidding highest.
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| ex-rights date | Phrases used to indicate that a stock is selling without a recently declared right or dividend. The ex-rights or ex-dividend date is generally four business days before the date of record.
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| firm commitment underwriting | An underwriting in which an investment banking firm commits to buy the entire issue and assumes all financial responsibility for any unsold shares.
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| Green Shoe provision | A contract provision that gives the underwriter the option to purchase additional shares at the offering price to cover overallotments.
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| initial public offering (IPO) | The original sale of a company's securities to the public. Also called an unseasoned new issue.
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| investment banks | Financial intermediaries who perform a variety of services, including aiding in the sale of securities, facilitating mergers and other corporate reorganizations, acting as brokers to both individual and institutional clients, and trading for their own accounts.
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| negotiated offer | The issuing firm negotiates a deal with one underwriter to offer a new issue rather than taking competitive bidding.
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| oversubscription privilege | Allows shareholders to purchase unsubscribed shares in a rights offering at the subscription price.
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| prospectus | The legal document that must be given to every investor who contemplates purchasing registered securities in an offering. It describes the details of the company and the particular offering.
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| red herring | First document released by an underwriter of a new issue to prospective investors.
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| registration statement | The registration that discloses all the pertinent information concerning the corporation that wants to make the offering. The statement is filed with the Securities and Exchange Commission.
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| regulation A | The securities regulation that exempts small public offerings (those valued at less than $1.5 million) from most registration requirements.
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| seasoned new issue | A new issue of stock after the company's securities have previously been issued. A seasoned new issue of common stock can be made by using a cash offer or a rights offer.
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| shelf registration | An SEC procedure that allows a firm to file a master registration statement summarizing planned financing for a two-year period, and then file short statements when the firm wishes to sell any of the approved master statement securities during that period.
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| standby fee | Amount paid to an underwriter who agrees to purchase any stock that is not subscribed to the public investor in a rights offering.
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| standby underwriting | An agreement whereby an underwriter agrees to purchase any stock that is not purchased by the public investor.
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| subscription price | Price that existing shareholders are allowed to pay for a share of stock in a rights offering.
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| syndicate | A group of investment banking companies that agree to cooperate in a joint venture to underwrite an offering of securities for resale to the public.
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| tombstone | An advertisement that announces a public offering of securities. It identifies the issuer, the type of security, the underwriters, and where additional information is available.
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| unseasoned new issue | Initial public offering (IPO).
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| venture capital | Early-stage financing of young companies seeking to grow rapidly.
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