direct stock purchase plan
Also found in: Acronyms.
Direct Stock-Purchase Program
A plan in which a publicly-traded company allows an investor to buy stock directly from the company rather than through a broker-dealer. Some companies offer direct stock purchase plans to raise financing at less expense to the investor (mainly through not charging commissions or fees). Some advisers recommend that first-time investors use direct stock purchase plans because of the reduced cost. It should not be confused with an employee stock option plan because direct stock purchase plans are open to anyone.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
direct stock purchase plan
A plan initiated by some firms that permits investors to purchase stock directly from the issuer (thereby avoiding brokerage commissions). Although generally open only to employees and current shareholders, an increasing number of companies allow nonstockholders to make direct purchases.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.