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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Underwriter

Definition:

This is the entity that brings new securities to the market. They act as middlemen by purchasing the new stock from the issuer and immediately reselling it to the public. They get a nice profit from it, too.

Example

Not to be confused with underTAKER—that's a different dark suit. 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 to The Street at a mark-up in price.

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