In an at-the-market offering, a listed company sets up a program with one or more sales agents, usually investment banks, to sell up to a stated dollar amount of new shares into the open market over time. The shares are sold at whatever the market price is when each sale happens, in small amounts, instead of in one large deal at a fixed price.
The company chooses when and how much to sell, so it can raise money when conditions suit it. Compared with a traditional follow-on offering, the process is flexible, has lower fees and avoids the sudden price drop that a big announcement can cause. It is normally set up under an effective shelf registration.
Investors should note that it adds shares, so existing holders are diluted over time, and the selling can weigh on the price. The company reports how much it has sold in its periodic filings, so the effect is visible only afterward.
Check the size of the program relative to the company, how much has been used and whether the company relies on it to fund operations.