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Re: wallstarb post# 84033

Thursday, 09/24/2009 10:54:24 AM

Thursday, September 24, 2009 10:54:24 AM

Post# of 252477
Looks to me like you are getting your information from Wikipedia, which in this rare case happens to have very weak entries. Using "dilutive" vs. "non-dilutive" to differentiate between primary and secondary offerings indicates to me that this entry was written by an amateur. (Not all offerings that increase the number of shares outstanding are dilutive - indeed they could theoretically be anti-dilutive).

The legal terminology is actually quite precise and simple:

IPO vs. Follow-on offering: The first public sale of securities is an IPO; any subsequent sales are follow-on offerings.

Primary vs. Secondary: If the company is selling shares, it is a primary offering. If existing shareholders are selling shares, it is a secondary offering.

This MNTA offering was a primary, follow-on offering.

In many cases an offering will be a mixed primary and a secondary - both the company and existing shareholders are selling shares.

I do grant that some non-lawyers use the term "secondary" more broadly to cover all sorts of follow-on offerings.

As to your initial point, any member of this board that happens to have a strong relationship with the underwriters could have gotten shares. That's the same for an IPO, or for any underwritten offering. No member of the public can automatically acquire shares in an underwritten offering - it's up to the underwriters to decide who gets them.

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