What is a Distribution Stock?
Distribution stocks are stock offerings that sold over an extended period of time. This is in contrast to selling the shares of stock in a single transaction. By selling a block of available stock in smaller increments, there is much less chance of creating an adverse effect in the marketplace and possibly causing a reduction in the market price associated with the stock. Companies also sometimes make use of distribution stock as a means of testing the market response to something new that the company is doing with their operation. One of the main advantages of distribution stock is that this gradual release over time of available shares helps to minimize the chances of the market place becoming flooded with shares of the same stock. When the number of available shares becomes much greater than the demand for those shares, the unit price per share is likely to drop. By breaking the new block of shares into smaller groupings, it is possible to release a few new shares now, a few more in
