Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Spot Secondary

What it is:

A spot secondary is a secondary stock offering that doesn't require the company to register with the Securities and Exchange Commission (SEC).

How it works (Example):

A spot secondary is generally a transaction with just one type of holder -- usually institutional investors -- and so it is not subject to the typical underwriting protocol associated with issuing stock

Why it Matters:

Since spot secondary issues avoid the time and costs associated with the normal SEC filing procedure, they are often more quickly distributed and discounted relative to shares sold to the public at large.