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ATM (At The Market) Program -


https://www.investopedia.com/terms/a/atthemarket.asp#:~:text=An%20at%2Dthe%2Dmarket%20(,(and%20a%20better%20price).


>>> At-the-Market Offering FAQs

What Is an At-the-Market Offering?

An at-the-market offering (ATM) takes place after a company goes public, as a sort of follow-up. In an ATM, a company can offer secondary public shares on any given day, usually depending on the prevailing market price, to raise capital.

An at-the-market (ATM) offering gives the issuing company the ability to raise capital as needed. If the company is not satisfied with the available price of shares on a given day, it can refrain from offering them, saving its new shares for another day (and a better price).

ATM offerings are sometimes referred to as controlled equity distributions because of their ability to sell shares into the secondary trading market at the current prevailing price.

How Does an At-the-Market Offering Affect the Stock Price?

Shareholders often react negatively to secondary offerings because they dilute existing shares and many are introduced below market prices. However, unlike the typical 7% to 10% drop in stock price that follows the announcement of a traditional follow-on equity offering, the average stock price change following the announcement of an ATM is minimal—often, just 1% to 3%.

Where Can I Find At-the Market Offerings?

Issuing companies set up ATM programs to prepare prospectuses and issue shares—a streamlined version of a regular initial public offering. A sales agent—usually an investment bank—then circulates news of the ATM to investors and financial firms, announcing a launch date when shares will be available.

Why Do Companies Do At-the Market Offerings?

An ATM offering program may provide a company with a more attractive and less dilutive capital-raising option. The availability of an ATM program also allows a company to take advantage of a temporarily higher stock price, a good earnings report (typically, the best time to launch an offering is shortly after the filing of the issuer’s Form 10-K or 10-Q), or an upcoming milestone event to raise money.

ATMs also tend to be faster and cheaper than traditional IPOs or other follow-on equity offerings. There is no lock-up period, and the incremental sale of shares has a minimal impact on the prevailing stock price.

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