Cutting off the flowback menace. (preventing offshore stock issues from re-entering domestic markets) (Selling Equities to the World, supplement to Euromoney magazine)

Given that an international equity offering can cost a company as much as $250,000, flowback is more than just a disappointment. As Charles Ryder of Barclays de Zoete Wedd put it, “Flowback defeats the object of the exercise.

Flowbackoccurs when shares placed outside a company’s home market return, as foreign investors sell the stock. The repatriation of large amounts of shares, especially if it takes place soon after the issue, can exert downward pressure on the company s stock price, undermine its international reputation and frustrate its attempts to broaden its shareholder base.