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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Underwriter

Definition:

The underwriter can be a person, but more likely it's a bank or firm that helps a company sell new stocks or securities to investors. They handle the many details of an offering, and they act as middlemen, buying stocks from the issuer and reselling 'em to the public (at a profit).

Example

Goldman Sachs is an underwriter. They financially back companies during the IPO process (and other financing events), such that they in fact own the company for a brief moment in time... like 5 minutes... and then turn around and sell that company at a mark-up in price.