Gross spread

(redirected from Underwriter Discount)

Gross spread

The fraction of the gross proceeds of an underwritten securities offering that is paid as compensation to the underwriters of the offering.

Gross Spread

In a public offering, the difference between the price an underwriter pays an issuer and the price at which it sells the offering to the public. That is, an underwriter pays the issuer an agreed-upon price to purchase an issue, which it then attempts to place with investors. When it places the issue, it charges the investor a certain price like any other trade. The difference is known as the gross spread; it forms the bulk of an underwriting firm's profits. See also: Fully subscribed, Overbooked, Underbooked.

gross spread

The difference in the price that an investor pays for a new security issue and the price paid the issuer by the lead underwriter. The gross spread is a function of a number of variables including the size of the issue and the riskiness, or price volatility, of the security. Also called underwriting spread.

Gross spread.

In an initial public offering (IPO), the gross spread is the difference between what the underwriters pay the issuing company per share and the per share price that investors pay. It's usually about 7%.

For example, if a stock is to be offered to the public at $10 a share, the underwriters may pay the issuing company around $9.30 per share. With millions of shares being sold, the 70 cents per share adds up to millions of dollars for the investment bank.

References in periodicals archive ?
Nasdaq: CRDC) today announced the full exercise of the overallotment option granted to the underwriters to purchase an additional 4,875,000 shares of common stock at the public offering price, less the underwriter discount, in connection with the company's recently announced public offering of 32,500,000 shares of its common stock and 191,474 shares of its Series A convertible preferred stock.
6 million from the offering, after deducting the underwriter discount and commissions and estimated expenses of the offering.
The net proceeds to the Company from the offering, after underwriter discount and transaction expenses, were approximately $521 million.
8 million after deducting the underwriter discount and estimated offering expenses.
The net proceeds of the offering, after underwriter discount and expenses, will be used to pay a portion of the consideration required to acquire Hardee's Food Systems, Inc.
5 million, after deducting underwriter discounts, commissions and estimated offering expenses.
23 million, after underwriter discounts, from the sale of the over-allotment shares.
Total net proceeds to Edgen from the offering, after deducting underwriter discounts and commissions and estimated offering expenses, are approximately $150.
665 per share and the company received proceeds of approximately $383,000, after underwriter discounts.
In addition, the Company has granted the underwriter an option to purchase up to 2,000,000 additional shares from the Company at the offering price, less underwriter discounts and commissions, within 30 days.
The company received proceeds, after underwriter discounts, placement fees and other expenses of $9.
All expenses of the selling stockholder associated with the offering, other than underwriter discounts and commissions, will be borne by the Company.