"The non-dilutive type of follow-on offering is when privately held shares are offered for sale by company directors or other insiders (such as venture capitalists) who may be looking to diversify their holdings. Because no new shares are created, the offering is not dilutive to existing shareholders, but the proceeds from the sale do not benefit the company in any way. Usually however, the increase in available shares allows more institutions to take non-trivial positions in the company."
the company's cash position would be increased if they were selling new shares. It would also be dilutive however. In this case, it looks as though insiders were selling all the shares in the offering so the company would not receive the proceeds. The selling shareholders would. Insider selling is generally not a positive sign but on occasion it can be useful if the company wants to increase the "float" without increasing the total number of shares outstanding.
Help me out - Weren't these existing shares that were owned by the the founding fathers or others? Just cashing in - no growth of the company as these were existing shares (reported due to the size of trade). The good news is they sold easily which is a bonus, but no real effect on the company, right?
there shouldnt be an effect as the shares were not diluted as it was from existing share holders but due to size they must file the SEC paperwork. Earnings will not be effected by the offering only really effects the PPS since it wont move much until all the shares are sold so this is where we need the hedge funds to step in and buy up these 40 million shares.