Key features
In a public offering, new shares are marketed broadly to the general investing public through securities firms. The issue price is often set at a certain discount to the market price at the time of the offering, and both existing shareholders and new investors can apply to purchase shares under the same terms.
What to keep in mind
The dilution caused by the increase in shares outstanding can reduce existing shareholders' per-share earnings and voting-rights ratio. Checking how the funds raised will be used — for growth investment or balance-sheet improvement — and how large the new issuance is relative to existing shares outstanding provides useful context for evaluating the offering.