Offerings and ATMs are ways for a company to raise capital.
A company announcing it may sell new shares is different from actually selling them and receiving the money.
Table of contents
Remember this first
First, 3 things to remember
- 1An offering is the act of raising money by selling securities such as stocks.
- 2ATM is a method of selling shares incrementally in the market.
- 3Distinguish between the limit available for sale and the quantity actually sold.
Let's first look at why a company creates more shares.
Companies may need money for research, operations, or debt repayment. They sometimes raise funds by creating and selling new shares. This increase in the number of shares is called a capital increase.
An offering refers to the sale of stocks or other securities. ATM has a different meaning than an automated teller machine; it is a method of selling shares incrementally at market prices.
Filing documents does not mean everything was sold today.
Registration is a documentation process for selling certain securities. A prospectus is a document explaining what is being sold and under what conditions. These documents and the actual sales results should be read separately.
Even if it says 'up to 10,000,000 dollars can be sold,' it does not mean 10,000,000 dollars has already been received. Look for the actual quantity, price, and amount in the announcement of the completed sale.
| Stage | Materials to read | Things not yet known |
|---|---|---|
| Preparation for sale | Registration documents | How much was actually sold |
| Terms of sale | Prospectus/Contract | Whether all shares were sold |
| Sales results | Filings announcing actual sales | Did they sell more after that? |
Even if the number of shares you own remains the same, your stake can decrease.
If I own 10 shares out of a total of 100 shares, that is 10%. If the company creates 25 new shares, I still have 10 shares, but I now hold 8% out of a total of 125 shares. This reduction in percentage is called dilution.
The table below shows the same principle with different numbers. It does not mean that the stock price will fall by the exact same percentage as the reduction in the ratio. The use of the new funds and the terms of sale also have an impact.
| Category | Total shares | My shares | Ownership percentage |
|---|---|---|---|
| Before issuance | 10,000,000 shares | 100,000 shares | 1.00% |
| After issuance | 12,500,000 shares | 100,000 shares | 0.80% |
To start, three questions are enough.
What is the maximum amount that can be sold? How much was actually sold? Where is the proceeds used? Write these three items down separately.
In addition to new shares, warrants, which are rights to purchase shares later, may also be attached. If there are unknown conditions, do not assume they do not exist; check them one by one in the next article.
You should not make such assumptions
“If the registration limit is 50,000,000 dollars, does that mean they dumped that much into the market today?”
The limit on what can be sold and the actual sales are different. You need more data detailing when and how much was sold.
Check what you have read.
- Is the company selling new shares?
- Did you distinguish between the sellable limit and the actual sales?
- Did you mark unknown conditions as unverified?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 2
- Applied Therapeutics · Prospectus Supplement (2023-08-11)New window
Corporate filings / SEC EDGAR · Verify 2026-10-20
Document examples illustrating the distinction between ATM limits and actual sales · Sales conditions based on market price; not a description of the company's current status · Examples of warrant exercise price, duration, quantity, adjustments, and ownership limit conditions - Using EDGAR to Research InvestmentsNew window
SEC Investor.gov · Verify 2026-10-20
Distinction between registration documents, periodic reports, and material event disclosures · How to find and read original disclosure documents - Convertible SecuritiesNew window
SEC Investor.gov · Verify 2026-10-20
Definition of convertible securities · Conversion conditions and potential for dilution
This is educational material for observation and information comprehension. Hypothetical examples do not represent actual stocks or performance and do not provide buy or sell recommendations.