oversubscribed

Oversubscribed

A situation in which the demand for an initial public offering of securities exceeds the number of shares issued.

Notes:

The goal of a public offering usually is to price the security issue at the exact price at which all the issued shares can be sold to investors, so there will be neither a shortage nor a surplus of securities. If there is more demand for a public offering than there is supply (shortage), it means a higher price could have been charged and the issuer could have raised more capital.

See also: Fully Subscribed, Investment Bank - IB, Initial Public Offering - IPO, Pot Is Clean, Prospectus, Public Offering Price - POP, Syndicate, Undersubscribed, Underwriting

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oversubscribed

1. Or, relating to, or being a new security issue for which there are more requests to purchase securities than are securities available for sale. For example, brokers may take a sufficient number of preliminary orders for a new issue of stock for which there are insufficient shares available to satisfy the demand. Also called overbooked.

2. Of, relating to, or being a buyback or takeover attempt in which more securities are offered than the purchaser has agreed to buy. In such a case the purchaser may decide to buy the additional securities or may buy the agreed-upon number on a pro rata basis.