cheap stock

cheap stock
USA
Securities (including common stock, stock options or warrants) issued to employees, directors or consultants at a price lower than the fair value of the underlying security as of the date of grant. The granting of such securities raises an issue as to how equity grants or issuances at below market price or fair value should be reflected in the company's financial statements. The grant of equity compensation usually occurs prior to an IPO.
For further information, see Practice Note, Issuance of Cheap Stock (www.practicallaw.com/9-381-7457).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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