Initial Offering Date

What is an ‘Initial Offering Date ‘

An initial offering date is the date at which a security is first made available for public purchase. Initial offering dates can be advertised for all types of securities with stocks and managed funds being two of the most common.

BREAKING DOWN ‘Initial Offering Date ‘

The initial offering date is set during the underwriting process. All types of securities will work with an underwriting team either in house or externally to prepare a security for its initial offering date. The underwriting and filing process for offering new securities in the market is different for each security. Stocks and mutual funds provide two examples of two of the most common types of new offerings.

Historically, new offerings are often underpriced leading up to their initial offering date which can potentially provide for large capital gains at issuance. This can also create pent-up demand for shares on the first day of trading and provide greater profit potential for those who can subscribe to the issue before the initial offering date.

Generally, new offerings will often have high trading volatility in the early phases of their public offering. This can occur more often for stocks since only a small percentage of the outstanding shares (typically less than 25%) are often eligible to trade on the first day.


Companies planning to offer their shares publicly on a public market exchange must undergo a thorough due diligence and underwriting process. Companies typically partner with investment banks such as Bank of America, JPMorgan and Morgan Stanly for underwriting services.

Underwriters on new initial public offerings are generally responsible for leading the initial public offering process, undergoing all due diligence, setting the price of the offering and marketing the offering to investors. Underwriting agreements typically involve support from the underwriters in buying newly offered shares and contingent purchases for shares after trading in the open market for a specified timeframe.

Mutual Funds

For mutual funds the process leading to an initial public offering is different than public stock since funds are subject to different regulations and regulatory filing requirements. In a mutual fund offering the company partners with a distributor who is also the principal underwriter on the fund. The distributor partners with the company’s legal and compliance teams to file a registration statement with the Securities and Exchange Commission which must include full details on the fund in a prospectus and statement of additional information.

Distributors serve as the underwriter, buy shares of the fund and are responsible for marketing the fund for its initial offering date. Distributors seek to list the fund with discount brokerages and financial advisor platforms across the industry. These are the primary channels of distribution for a mutual fund and are important for its launch.

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Cobi Jones writes about the blockchain community in the US. He is an entrepreneur and private investor in blockchain projects