TERMINOLOGY: SHELF REGISTRATION / PUBLIC OFFERING DEFINITION

A shelf offering, public offering, or shelf registration is a U.S. Securities and Exchange Commission (SEC) provision that allows an equity issuer (such as a corporation) to register a new issue of securities without having to sell the entire issue at once. The issuer can instead sell portions of the issue over a three-year period without re-registering the security or incurring penalties.

A shelf offering is also known as a shelf reg.; it is formally known as SEC Rule 415. It results in dilution and often causes the price of the stock to collapse rapidly. This can result in a recent purchaser of the stock becoming a bag holder and incurring a huge loss.