Eating Stock

Eating Stock

Purchasing stock not because you desire it but because you are forced to do so.

Notes:

Underwriters who can't find enough investors to purchase IPO shares are sometimes forced to eat stock. The underwriter is forced to purchase the shares that could not be sold to the public.

See also: Direct Public Offering, Gross Spread, Gun Jumping, IPO, Lock-up Agreement, Prospectus, Public Offering Price (POP), Red Herring, Stock, Underwriter

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Eating stock

When an underwriter can't find buyers for a stock and therefore has to buy them for his own account.