Treasury Offering

A treasury offering is an open market sale of treasury stock for any takers. It’s when a company is selling its own shares of stock (previously hidden away in the company treasury vault) to any interested investors.

Companies might have this garage sale of treasury shares in order to raise more money, or to prevent a hostile takeover. It’s common for companies to have bought their own shares on the open market, put them in their vault, and saved them for a rainy day.

Note: treasury shares aren’t like common stock or preferred stock; they're not considered outstanding, and there aren't voting rights attached. They also have the potential to make a company look like it’s not doing so great, since it’s a cheaper way to raise capital than regular shares. Perhaps the company is having a go at a last-ditch effort before the company value falls.

For existing shareholders, treasury offerings aren’t fun, since they dilute the earnings and dividends among a larger crowd than before. Still, for the right investors, a treasury offering can be a unique opportunity to get in on a business that appears to be successful.