At-the-market (ATM) offering
A program to sell new shares gradually into the existing market through a sales agent, rather than in one priced offering.
In an ATM program, a company registers shares for sale, usually on a shelf registration, and instructs a sales agent to sell them at prevailing market prices over time, up to a set dollar amount. Shares are sold into the market rather than to a single investor. The company discloses the program and the amounts sold in its filings.
Traders care because ATM sales add supply and dilute existing holders as shares are sold. Companies often use ATMs when the stock trades at a premium to net asset value or when they need funding. Check the program size and the amount already used against the share count.
Worked example (illustrative numbers, not real data): a company with 100 million shares sets up a 500 million dollar ATM and sells 10 million shares at 25 dollars. It raises 250 million dollars and dilutes existing holders by about 10 percent.