Published on July 19, 2021

What is an ATM Offering?

An ATM program allows a public company to raise capital over time by offering securities into the already existing trading market. The company sells newly issued shares periodically, over time, on an as-needed basis based on the current trading price of the securities.

Why would a company use an ATM Offering?

  1. Raise capital by selling stock into natural trading volume of the market
  2. Often effective whenever or not the market is receptive to other types of offerings
  3. Flexibility in terms of commitment and use
  4. Not designed for a fixed amount of shares, but a fixed amount of capital

Comparison to Traditional Follow-on Offering

At-the-Market Offering
  • A continuous offering
  • Shares are dribbled out
  • Sold on an agency basis through one or more distribution agents; may be sold on a principal basis
  • Issuer determines amount, floor price, and duration of any issuance
  • Amounts, floor prices, and duration of placements may vary over the life of the program, and can be changed at any time
Follow-on Offering
  • A "bullet" or single offering
  • Shares are sold all at once
  • Sold as principal through a syndicate of underwriters
  • The clearing price and size of issuance is based on investor demand at a specific point in time

Identifying an ATM Offering in FlashSEC

Impact of ATM on Price Action

$XELA saw a 40% decrease off of its highs when the ATM offering was triggered on 30-Jun-2021 due to an increase of supply increasing both outstanding shares and float.

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