Follow-On Offering

follow-on offering

A stock issue that follows an initial public stock offering from a firm. The follow-on offering can consist of primary and/or secondary shares. Companies will sometimes authorize additional shares that are issued at a higher price following a successful initial public offering. Also called add-on financing, piggyback.

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Follow-On Offering

Any issue of stock by a publicly-traded company other than the IPO. A company makes a public offering through underwriters, who have the responsibility to place the offering with individual and institutional investors. Companies make follow-on offerings in order to raise financing for expanded operations, or because they have become cash poor and need to finance their current operations. The offerings themselves give investors a portion of ownership in the company issuing them. See also: All Holders Rule, Anti-dilution provision.