Free course · Lesson 8 · 3 min
Equity lines: the fund that buys and resells
In 3 minutes: what an equity line is, why it runs on volume, and where it would show up on Panda Desk.
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01What an equity line is
The company signs a contract with a fund. Whenever it wants cash, it tells the fund to buy new shares, at a discount.
02Not the same as an ATM
In an ATM (lesson 7), an agent sells for the company. In an equity line, the fund buys first, then sells the shares itself.
03Volume sets the size
The contract ties each purchase to the stock’s volume. A quiet stock raises little; a busy day lets the company draw more.
04Where it shows up: FILINGS
The contract comes out in an 8-K. Before the fund can resell, its shares must be registered for resale.
- 8-KContract signed. Item 1.01, a material agreement, filed within 4 business days.
- S-1 or S-3The company registers the fund’s shares for resale.
- EFFECTThe fund can now resell what it buys.
- ThenPurchase notices, on the busy days.
05No row of its own
Panda Desk has no equity line row in DILUTION INSTRUMENTS. Read FILINGS and the Supply grade instead.
063 checks for any equity line
Sources
- Form 8-K: Item 1.01, entry into a material definitive agreement, and the general deadline of 4 business days.
- 17 CFR 230.415(a)(4): the at-the-market offering, for the contrast in step 2.
Panda Desk shows these rows for any small cap, next to your montage. tspanda.com
Not financial advice. PNDA is fictional, and nothing here is a recommendation to buy or sell.