Underwriter

An underwriter is the investment bank that manages a new stock or bond issue, pricing it and selling it to investors in return for a fee.

Underwriters take on the risk of the sale: in a firm commitment deal, they buy the shares from the company and resell them to investors.

Related terms

IPO (initial public offering): An IPO is the first time a company sells shares to the public, after which its stock trades on an exchange.

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