Top 10 Practice Tips: Secondary Offerings

This practice note covers 10 practical tips that counsel in a secondary offering can use to facilitate execution and avoid common pitfalls. Secondary offerings of equity securities by stockholders of public companies are one of the more frequent capital markets transactions. However, many secondary offerings are conducted on short notice, and transactions can take a number of different forms based on the nature of the issuer, the selling stockholders, and the securities being sold. The transaction itself is also subject to a number of regulatory and logistical challenges and may have a significant impact on the post-transaction governance and ownership of the issuer going forward, all of which must be addressed at the outset. Practitioners representing issuers, selling stockholders, or underwriters should familiarize themselves with the structure of the offering in advance. The following practice tips highlight some of the most crucial issues to be aware of and plan around.