Underwriter
A company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. An underwriter works closely with the issuing body to determine the offering price of the securities, buys them from the issuer and sells them to investors via the underwriter's distribution network. Investopedia Says:
Underwriters generally receive underwriting fees from their issuing clients, but they also usually earn profits when selling the underwritten shares to investors. However, underwriters assume the responsibility of distributing a securities issue to the public. If they can't sell all of the securities at the specified offering price, they may be forced to sell the securities for less than they paid for them, or retain the securities themselves. Related Terms:
Break Issue
Due Diligence Meeting
Eating Stock
Initial Public Offering - IPO
Issuer
Lead Underwriter
Primary Dealer
Prospectus
Red Herring
Stabilizing Bid |