Obocon Inc. (OBCN)

[Calvin Hobbes]

NOT WHAT TONY IS DOING ..

Stock Offering Explained
https://www.pennypro.com/penny-stocks-trading-stock-offering-explained/

You probably guessed it… a stock offering is when a company offers more shares of its stock. Now, you might think a stock offering is an initial public offering (IPO)… well it’s not. You see, a company issues an IPO when it’s the first time the stock is ever offered to the public to trade.

If you don’t already know, private companies use IPOs to raise capital to grow their operations.

However, what happens if a publicly-traded company wants to raise capital?

Well, they can either do a secondary offering or a registered direct offering.

Now, all you really need to know is the fact that these are some of the ways companies raise capital after they’ve gone public. In other words, they’re offering more stock to the public to raise capital.

Stock offerings actually affect the price of a stock a lot… but it can uncover some opportunities, if you also know a bit of technical analysis.

If you haven’t figured out yet, when a company offers more stock to the public… it actually dilutes their shares. If a company is conducting a stock offering, it decreases existing shareholders’ ownership… and increases the total shares outstanding.

But what happens to a stock if it offers more shares in the secondary market to the public?

Well, the stock goes down.

That said, let’s take a look at how I used this news to trade a stock that was down around 65% after it announced the offering… and no I wasn’t trying to catch a falling knife here.