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Simple English definitions for legal terms
negotiated offering
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A quick definition of negotiated offering:
A negotiated offering is when a company wants to sell some of its ownership to the public, and they work with a group of people called underwriters to figure out how to do it. They negotiate and agree on things like how much money the company will get, how much the underwriters will get paid, and how many shares of ownership will be sold. This is different from other types of offerings, like private offerings that are only for a small group of people or public offerings that are open to everyone.
A more thorough explanation:
A negotiated offering is a type of securities offering where the terms, including the compensation of the underwriters, are negotiated between the issuer and the underwriters. This is different from a public offering, where the terms are set by the market.
- Initial Public Offering (IPO): This is a company's first public sale of stock. The terms of the offering are negotiated between the company and the underwriters.
- Private Placement: This is an offering made only to a small group of interested buyers. The terms are negotiated between the issuer and the buyers.
These examples illustrate how the terms of a negotiated offering are determined through negotiations between the issuer and the underwriters or buyers, rather than being set by the market.