At-the-Market Offering
Updated
DEFINITION
An at-the-market offering, often shortened to ATM offering, lets an issuer sell newly issued securities into an existing trading market over time at market-related prices. A company may use a sales agent and sell in multiple transactions rather than raise the entire amount at once. The announced program size is available capacity, not proof that the company has already received that amount.
For a hypothetical common-stock example, issuing one million shares at $20 each produces $20 million in gross proceeds before fees. The additional shares increase the share count. An ATM describes how securities are sold; preferred stock describes a type of security. Read the issuer’s offering documents to identify what is being sold and the intended use of proceeds.
IN A SENTENCE
The company announced an ATM program, but its filing must show how much it actually sold.
Key facts
- ATM means
- At the market
- Program limit
- Capacity, not completed proceeds
- Common-stock consideration
- Additional shares can dilute ownership percentages
Common questions
Is an ATM a Bitcoin cash machine?
Not in a corporate-financing discussion. Here ATM refers to an at-the-market securities offering.
Does announcing a program mean it is fully used?
No. Sales can occur over time, and the issuer may not sell the full authorized amount.
Is it the same as preferred stock?
No. An offering method and a security’s rights are different features. Check the prospectus for both.
Sources and further reading
Issuer ATM program disclosure filed with the SEC
This definition explains the term; it is not investment or legal advice.