HOW DO ATMS WORK?

 

Managing the impact, timing, cost and risk of the fundraising process

With an at-the-market (ATM) offering, an exchange-listed company incrementally sells newly issued shares into the trading market through a designated broker-dealer at prevailing market prices, rather than at a fixed or negotiated price. ATM financing allows the issuer to feed securities into the market over a period of time based on the market price of the issuer’s common stock at the time of sale, giving the issuer control over the timing and the amount of shares offered, including the choice to refrain from offering shares if unsatisfied with the available price on a particular day.

The amount of securities sold in any single at-the-market equity offering is usually insignificant compared to the issuer’s public float or the daily trading volume of the issuer’s stock. Expert ATM broker-dealers, such as the Brinson Patrick team, have the discipline and patience to do multiple small, average trades to maintain discretion.

A long-term financing strategy

ATM offerings are tools for companies seeking to build solid financing strategies, providing flexibility and reducing the overall cost of capitalATM offerings are tools for companies seeking to build solid financing strategies that provide flexibility and reduce the overall cost of capital. Financing strategies such as our DOCS® (Dynamic Offering of Common Stock) ATM financing facility provide the most control on the timing of capital-raising, as well as flexibility on the amounts of capital raised, without burning a lot of executive time and unnecessarily diluting current shareholders with price discounts.

To utilize an ATM offering, an issuer must be eligible to use a registration statement on Form S-3— the professionals at Brinson Patrick would be happy to talk you through the steps required to set up a DOCS® ATM.

A big benefit of the ATM is that you can control how aggressively you want to raise capital [and] you can work with Brinson Patrick as to how aggressively you want them to be selling your shares into the market. It’s a very flexible program.”

CFO, REIT

How do ATMs serve the life sciences industry? Take a look. »

How have ATMs helped alleviate external economic forces on REITs? »

At-the-Market Offerings – Q&A with Todd Wyche, CEO »

Contact Brinson Patrick »