ac-equity-capital-markets

Equity capital markets

Overview

Primary equity issuance is where new shares are created and sold, and its mechanics explain a great deal of what happens to a share price afterwards. An issue is priced through a process, allocated by a bookrunner, stabilised for a period, and then released from a lock-up that has been holding supply back. Each of those steps is scheduled, and each leaves a footprint in the market.

This skill covers that machinery: how a book is built and allocated, what the greenshoe does and who pays for it, what a lock-up expiry releases, how blocks and follow-ons are priced against the market, how a rights issue's discount and its rump placement work, and how a direct listing or a SPAC differs from a traditional offering. The trading of the shares afterwards belongs to the stock trading skill.

Primary sources: https://www.sec.gov/investor and https://www.finra.org/.

When to use

• When an issuer is raising equity and the process mechanics matter.
• When a lock-up expiry or an index-driven supply event is approaching.
• When a block trade or a follow-on prices at a discount to the market.
• When a rights issue, direct listing, or SPAC transaction needs reading.

When NOT to use

• For trading the shares in the secondary market (use ac-stock-trading).
• For the price adjustment existing holders face (use ac-corporate-actions).
• For the investment case for the company (use ac-equity-research).

Subskill Index

Leaf	Domain segment	Scope (one line)
subskills/bookbuilding-and-allocation.md	investing/bookbuilding-and-allocation	Building a book, pricing it, and who receives shares.
subskills/greenshoe-and-stabilisation.md	investing/greenshoe-and-stabilisation	The over-allotment option, stabilisation, and the syndicate's short position.
subskills/lockup-expiry-flows.md	investing/lockup-expiry-flows	What a lock-up releases, when, and how the supply is absorbed.
subskills/follow-on-and-blocks.md	investing/follow-on-and-blocks	Priced offerings, bought deals, and the concession a block carries.
subskills/rights-issues.md	investing/rights-issues	Subscription price, discount, renounceability, and the rump placement.
subskills/direct-listings-and-spacs.md	investing/direct-listings-and-spacs	No-bookbuild listings, SPAC redemption, and de-SPAC dilution.
subskills/issuance-record.md	investing/issuance-record	The written record: issue terms, supply calendar, and dilution.

Status and honest limits

Issue mechanics are documented in filings and prospectuses, but the allocation process is discretionary and lightly observed, so conclusions about who received shares are inferences rather than facts. Lock-up terms are contractual and can be waived by the bookrunner, which means a dated calendar is a schedule rather than a promise. Nothing here recommends participating in an issue, and a supply event that is known in advance is usually at least partly priced, which is the central difficulty of using it as a trading signal.