Underwriting Spread

See: Underwriter. See: Underwriting Risk. See: Spread.

Yeah...spread. That's how most offerings work. A company will sell its shares to the public for $22 a share, but the underwriter will buy them for $21 a share, with the underwriter making a spread there of $1, or about 4%. Multiply that dollar by, say, 25 million shares being sold...and that's a decent amount of dough to the bank.