Follow-On Offering

A follow-on offering (FPO) is an issuance of stock shares following a company’s initial public offering (IPO). There are two types of follow-on offerings, diluted and non-diluted. A diluted follow-on offering results in the company issuing new shares, which causes the lowering of a company’s earnings per share (EPS). During a non-diluted follow-on offering, shares coming into the market already existing and the EPS remains unchanged. Companies offering additional shares must register the FPO offering and provide a prospectus to regulators.