oversubscribed(redirected from Oversubscribed (disambiguation))
Also found in: Dictionary, Thesaurus, Encyclopedia.
An initial public offering (IPO) is oversubscribed when investor demand for the shares is greater than the number of shares being issued.
What typically happens is that the share price climbs, sometimes dramatically, as trading begins in the secondary market, though the price may drop back closer to the offering price after a period of active trading.
The group of investment banks, known as a syndicate, that underwrites a hot IPO may have an agreement, known as a green shoe clause, with the issuing company to sell additional shares at the same offering price.