Legal Definitions - offering price

The offering price refers to the initial price at which a seller proposes to sell a good, service, or asset. It is the price set by the seller when they first make an item available for purchase or investment, indicating their desired compensation for the item.

Here are some examples to illustrate the concept:

• Real Estate Sale: Imagine a couple decides to sell their home. After consulting with a real estate agent, they list their property on the market for $450,000. This $450,000 is the offering price. It's the initial amount they are asking for the house, hoping to attract buyers. Potential buyers might then make offers above or below this price, but the $450,000 is the seller's starting point.

• Initial Public Offering (IPO): A rapidly growing tech startup decides to sell shares to the public for the first time. Before the shares are traded on a stock exchange, the company, with the help of investment banks, sets a specific price per share for these initial sales. If they announce that shares will be sold at $25 each to initial investors, this $25 is the offering price for their stock. It's the price at which the company is first making its ownership available to the public.

• Art Auction: A renowned art gallery decides to sell a newly acquired painting by a famous artist. Before the auction begins, the gallery sets a "reserve price" or an initial bid amount, but for direct sales, they might simply list the painting with a tag indicating its value. If they display the painting with a price tag of $1.2 million, this is the offering price. It's the price at which the gallery is initially presenting the artwork for sale to collectors and enthusiasts.