What Is a Secondary Offering?

A secondary offering is when a firm that has already completed an initial public offering sells new or tightly held shares (IPO). Secondary offerings are divided into two categories. A non-dilutive secondary offering is a stock sale in which one or more big investors sell all or a significant portion of their interests in a firm. The sale revenues are distributed to the investors who sell their shares. A dilutive secondary offering, on the other hand, entails the creation of new shares and their sale to the general public.
Follow-on offerings or follow-on public offers are terms used to describe secondary offerings (FPOs).