Bought Out Deal

A bought-out deal is a stock offering where an investment bank purchases the entire issue of shares from a company and then attempts to sell those shares to other investors. Benefits of a bought-out deal: 1. The company doesn't have to worry about subscription as the investment bank buys the entire offering.2. The investment bank can negotiate a discount on the share price. Risks of a bought-out deal: 1. The investment bank bears the risk of selling the shares to investors to recoup the principal or make a profit. 2. There's a risk that other investors may show no interest in the shares. 3. If the issue size is large, the investment bank may team up with others to fulfill the purchase.