At-the-market offering
Also known as: ATM offering
An at-the-market offering, or ATM, is a way for an already public company to sell new shares gradually into the existing trading market rather than all at once. Instead of pricing a large block overnight the way a traditional does, the company sets up an agreement with one or more -dealers who sell shares in small increments over days, weeks, or months, whenever the company chooses to tap the program, at whatever price the happens to be trading at that moment.
The appeal is flexibility and reduced price impact. A company can raise capital opportunistically, selling more on days when the is strong and pulling back when it is weak, without announcing a fixed size or committing to a single pricing event that can spook the market. Because shares are sold in small pieces spread over time, an ATM program tends to put much less immediate pressure on the price than a traditional offering.
ATMs are especially common among and early-stage biotech and other companies that need to raise capital regularly to fund operations or growth. The tradeoff for investors is that the ongoing still dilute existing over time, even if no single sale feels dramatic, so a company running a large ATM program is one to watch for its cumulative effect on .