The sale of shares belonging to a significant shareholder, like Clarence from Modulux, Inc., is an example of what?

The sale of shares by a significant shareholder, such as Clarence from Modulux, Inc., is categorized as a secondary offering. This type of transaction occurs when existing shareholders sell their shares to the public, as opposed to an initial public offering (IPO), where a company sells new shares to raise capital for the first time.

In the case of a secondary offering, the company itself does not receive any of the proceeds from the sale; instead, the money goes directly to the selling shareholders. This can affect the overall market for the company's stock, as it can increase the supply of shares available for trading.

Understanding this distinction is crucial, as secondary offerings play an important role in the overall market dynamics and the behavior of stock prices.